Message from the Queen

Earl Peel: My Lords, I have the honour to present to your Lordships a message from Her Majesty the Queen, signed by her own hand. The message is as follows:
	"I have received with great satisfaction the dutiful and loyal expression of your thanks for the Speech with which I opened the present Session of Parliament".

EU: Reform Treaty

Lord Blackwell: asked Her Majesty's Government:
	Which articles of the former treaty establishing a constitution for Europe will not be reflected in the consolidated European Union treaty base if the proposed European Union reform treaty is adopted.

Baroness Ashton of Upholland: My Lords, rather than considering comparisons with a treaty that never came into force, the European Union Select Committee of your Lordships' House has proposed to conduct its assessment of the impact of the reform treaty on the basis of the changes that it makes to the treaties that are currently in force. That is a sensible approach, which the Government support. We will provide the committee with a comparison of the reform treaty with the existing treaties.

Lord Blackwell: My Lords, I thank the Minister for her response, although I am disappointed that it did not better address my Question. Has she seen, and does she agree with, the report of the scrutiny committee in another place, which suggests that only one article of the previous constitutional treaty is not reflected in the new treaty and that only one article has been added to the new treaty?

Baroness Ashton of Upholland: My Lords, I have seen and read the report from another place. I refer the noble Lord—as I always do—to paragraph 76 of that estimable report, which is an interesting part of the analysis of the UK Government's position. However, I understand that the Government have not yet formally responded to the report. The noble Lord will know that the important aspect of our deliberations on the new treaty is to understand the changes to our current treaty obligations that will be in the new treaty. That is the right way to continue.

Lord Tomlinson: My Lords, is not the important thing about the proposed reform treaty that every single position regarded as imperative by the British Government and by the overwhelming majority of Members of Parliament has been secured? That being the case, what we need to do now is to get on with ratification. That process will show that there is no need for further nonsense talk about referendums.

Baroness Ashton of Upholland: My Lords, I agree entirely with my noble friend.

Lord Dykes: My Lords, does the Leader of the House agree that one of the greatest assets in the revised text remains the scrutiny and participation by both the European Parliament and the national parliaments? Is that not particularly suitable for the small number of member states where these procedures are regarded feverishly and, indeed, semi-hysterically?

Baroness Ashton of Upholland: My Lords, I hesitate to describe anything as semi-hysterical. However, it is important to recognise that the considerations by national parliaments, which are very important, as the noble Lord, Lord Dykes, said, are a fundamental part of the process by which we will go forward in the European Union.

Lord Forsyth of Drumlean: My Lords, is the failure on the part of the Minister to answer my noble friend's Question owing to the fact that it would reveal that the promise in the manifesto to give the people a say on this matter through a referendum is being reneged on? What exactly did the Government mean in the gracious Speech when they talked about making Parliament more accountable, given that they propose to give the powers of this Parliament to a supranational body without the consent of the people and on a whipped vote on their side of the House?

Baroness Ashton of Upholland: My Lords, I completely disagree with the noble Lord. I do not accept for one moment that what we are discussing in the reform treaty is the constitutional treaty. It is very simple: there was a proposal, which was abandoned, for a new constitution for the European Union. Had that proposal been taken forward, it would have been right, as we said in our manifesto, to have a referendum. This is not the same thing, however many times noble Lords try to pretend that it is.

Lord Harrison: My Lords, is my noble friend aware that Professor Chalmers of the LSE, in his evidence to the European Union Select Committee this Tuesday, said that, compared with the Maastricht treaty and indeed the Single European Act, the current reform treaty is of relatively little significance in altering the powers of the Government of this country?

Baroness Ashton of Upholland: My Lords, I did not know about that, but I am sure that my noble friend is correct in his report of the analysis that has been made. This is an important reform treaty. It is important for Parliament to debate it, as Parliament has always debated such matters. It is important for us to have full debates on the ratification process. That is an appropriate mechanism by which we should take this forward and that is what we should do.

Lord Howell of Guildford: My Lords, it would be useful to have an answer to the Question asked by my noble friend Lord Blackwell. Regardless of whether we have a referendum—I suspect that we probably will in the end, now that 12 heads of member states, all the authors of the previous treaty and some authors of the present treaty concede that this is 90 or 95 per cent similar to the constitution and contains all the European constitution treaty provisions—is it still government policy to go on denying that this is a constitutional treaty? That might be rather a waste of time when everyone agrees that it is.

Baroness Ashton of Upholland: My Lords, I do not know how much clearer I can be. This is a reform treaty, which reforms the existing treaties. There is little point in debating something that will never be—in other words, the abandoned constitutional treaty—and trying to refer back to it in order, I guess, to make the political point that the noble Lord's party wishes to make: that somehow this is still the same thing, which we declare it is not. The interesting thing, when we have gone through the ratification process of Parliament, will be to see whether the noble Lord's party will then say that that is insufficient and no longer appropriate and that, instead of agreeing that Parliament is the right forum in which to debate this, they want a referendum. We wait with great interest.

Lord Slynn of Hadley: My Lords, will the Government now explain, as I have asked them to do before, that not only is 90 or 95 per cent of the new draft in the constitution treaty, but it has been there since Maastricht, since Amsterdam and so on? Most of it is simply a collation of what we have been living with and applying in the Community for 50 years and less.

Baroness Ashton of Upholland: Indeed, my Lords. When we come on to the debates, one of the interesting aspects that noble Lords will be particularly concerned to look at is the red lines that the UK has secured, which are important as we move forward. Let me say just one thing in a positive vein. It is very important that we are part of the European Union and, as we now have 27 members, that we find better ways of working together in the future.

Lord Morgan: My Lords, is there not something quite illogical in the Opposition's position whereby they complain that powers are being taken away from our Parliament by Brussels, yet they themselves want to substitute government by Parliament with government by referendum?

Baroness Ashton of Upholland: My Lords, I hesitate to comment on the illogicality of the Opposition.

Lord Elton: My Lords, can the Leader of the House tell us whether the protection of the British position referred to by the noble Lord, Lord Tomlinson, is contingent on any changes in the present system of voting in the European Union?

Baroness Ashton of Upholland: My Lords, I am not entirely sure whether the noble Lord is referring to qualified majority voting. There are issues about QMV and the way in which it is used within the Union and, again, I am sure that we will debate these in great detail. There are proposals to use the system known as passerelle, a mechanism by which one can deal sometimes with technical points and at other times with more important issues than the technicalities of agreed lines that look at whether it is better to move from unanimity to qualified majority voting. But the critical factor in this is that one can move from unanimity to qualified majority voting only by unanimous agreement.

Missile Defence

Lord Wallace of Saltaire: asked Her Majesty's Government:
	How they intend to inform Parliament about the implications for British involvement in the United States missile defence system of recent United States—Russian negotiations on the system and its future deployment.

Baroness Taylor of Bolton: My Lords, first, I am sure the whole House will wish to join me in offering sincere condolences to the family and friends of two service personnel who died in Iraq on Tuesday when the RAF Puma helicopter in which they were travelling crashed near Baghdad. Our thoughts go out to those families.
	The bilateral discussions between Russia and the United States over co-operation on ballistic missile defence are not for the UK to comment on, although we welcome the progress being made. Parliament will be informed of any outcome of the discussions that affects the United Kingdom.

Lord Wallace of Saltaire: My Lords, we on these Benches share in the condolences expressed for the two soldiers killed in the helicopter crash. I should declare a geographical interest in that Menwith Hill is an American enclave on British soil and is very close to Saltaire. I pass by it frequently.
	In the past two weeks I had an interesting discussion with a visiting Czech Minister about the Czech Government's regular involvement in, or at least briefing by the Americans on, the bilateral negotiations. Similarly, I have read about the Polish Government's comments on them. Are the British Government not being well informed about these negotiations, or are they being informed but are not telling the British Parliament? In February, the last Prime Minister promised the then Leader of my party that the Government would "regularly keep Parliament informed" of developments in missile defence. On 25 July, just as we broke for the summer, they issued a Written Statement. The Government are not keeping Parliament informed about this important issue.

Baroness Taylor of Bolton: My Lords, I reject the suggestion that Parliament is not being kept informed, or indeed that we have reneged on any of the promises given by the then Prime Minister in February. The siting of ballistic missile defence assets in Poland or the Czech Republic is a bilateral issue between the United States with each of those two nations. Obviously they will have internal discussions themselves about the way forward, but the decisions on that are not for the United Kingdom. As I said, if there were issues which affected this country, we would of course inform the House. Further, on keeping the House informed, there have been Parliamentary Questions and Written Statements. Although the noble Lord quotes the former Prime Minister, he should remember what he actually said about holding discussions in the House:
	"When we have a proposition to put, we will come back".—[Official Report, Commons, 28/2/07; col. 289.].

Baroness Williams of Crosby: My Lords, I find the Minister's reply quite puzzling, because Menwith Hill is on British soil and is the result of a direct discussion between the United States Government and that of the United Kingdom. It is without any doubt part of the missile defence system of which the proposed installations in Poland and the Czech Republic are further parts. The Minister will recognise that the issue of nuclear proliferation is crucial to the United Kingdom and the world, and that it is deeply affected by Russia's willingness to co-operate. That co-operation is now dwindling in the face of what it regards as a dangerous level of encirclement. Will the Minister consider whether there should not be some discussion in Parliament, the last debate on this crucial issue having been held four years ago?

Baroness Taylor of Bolton: My Lords, nothing of substance has changed in the intervening period and Ministers have kept the House informed in terms of developments at both Fylingdales and Menwith Hill. However, the decisions debated in 2003 did envisage those future developments. I reiterate the fact that Ministers will keep the House informed. Debates are not a matter for Ministers, but for the usual channels as well as other parties. I am sure that there will be debates in the future, but the Government's commitment is for when there is a proposition to be put to Parliament.

Lord Howell of Guildford: My Lords, like the noble Baroness, Lady Williams, I find the Minister's attitude puzzling. The Russians are clearly extremely agitated by all this. They are threatening to abrogate treaties, the general tension is rising and there is talk of a return to Cold War attitudes. None of this is in Britain's interest. Even if we do not have a direct, physical and specific involvement in this issue, is not this a time when our diplomacy should be deployed in skilful ways? Perhaps we should, to coin a phrase, be a little less joined hip to hip with Washington's strategy.

Baroness Taylor of Bolton: My Lords, nothing I have said detracts from the suggestion that diplomacy should be employed in normal ways. That is what is happening. There have been some worrying developments within Russia and some of what has been said about the conventional forces in Europe treaty is causing concern. Those matters are discussed both between the United States and the Russians and in the NATO context, and Britain will continue to play its part in diplomacy on issues such as that.

Lord Wallace of Saltaire: My Lords, can the Minister confirm that the missile defence issue is being dealt with bilaterally—US to Czech, US to Poles, US to Britain and US to Russia—and not as a very important multilateral issue for NATO and in East-West relations? Would it not be more appropriate for this to be properly handled as a multilateral security matter?

Baroness Taylor of Bolton: My Lord, NATO has a role to play and plays it. Holding bilateral discussions on certain aspects does not exclude that.

Mobile Phone Charges

Baroness Miller of Hendon: asked Her Majesty's Government:
	Why they resisted proposals to impose lower "roaming" mobile telephone charges to customers than were ultimately fixed by the European Union, and what benefits ensue to United Kingdom users from the higher charges that now apply instead of the lower ones that were proposed.

Lord Bach: My Lords, our view was that roaming prices were higher than could be justified. The question was how, not whether, to address the problem. We had misgivings about the original Commission proposal, which could have reduced charges further but at the expense of reducing existing beneficial terms for UK users in the United Kingdom. We successfully sought to strike a balance that would benefit mobile phone users without stifling competition and innovation in the UK mobile phone industry. We are delighted with the result, which has lowered prices by up to 60 per cent.

Baroness Miller of Hendon: My Lords, I thank the Minister for that Answer. I am glad that he is obviously delighted with what happened. What comment does he have to make on the data that the Times newspaper obtained under the Freedom of Information Act which indicated that the former Industry Minister was acting in close connection with the phone companies via one of her officials? Is there any connection between the negotiations that the Government carried out on roaming charges and the substantial £22 billion that came to the Government through licence fees from the operators?

Lord Bach: My Lords, let me deal first with the noble Baroness's second question and state categorically that there was no deal of any kind. There has been no deal with the operators at all and the suggestion which appeared in the newspaper was false. As to her first question about our conversations with the network companies, of course, to make sure that we got details right, we had to understand the companies' issues and take account of their concerns where we felt they were justified. We make no apology for that. We never took our eye off the ball in achieving a good deal for customers. All the companies with which we dealt understood from the beginning that our goal was to achieve the best deal for UK consumers, and we were talking to them in exactly that context.

Lord Razzall: My Lords, does the Minister accept, whatever the merits of this decision, that the appearance was given—we saw it all in the Times—that his department was more on the side of the mobile phone operators than of the consumer? Is he aware that we have long argued from these Benches that there is a fundamental conflict of interest in his department between representing the interests of business and, at the same time, representing the interests of the consumer? Does he not agree that this demonstrates how right we have been?

Lord Bach: My Lords, I do not agree. The lowest price proposed by the European Parliament was actually below the cost of providing the service and was therefore uneconomic. We believed in a practical solution and were concerned that the earlier proposals would mean the operators would have to raise UK call charges and reduce the subsidy on handsets, thus increasing the cost for domestic users. Everyone, including the European Parliament, believes that the agreement that was finally reached has been a great success. By listening to business and to consumers, we helped each of them.

Lord Maxton: My Lords, is my noble friend aware that Skype, a company that uses the internet to provide telephone services, has recently provided mobile phones to subscribers? That means anyone who uses its service will be able to phone another Skype customer for nothing and will be able to use normal telephone lines at very low prices from anywhere in the world. As services such as this develop, will normal mobile telephone companies not be forced to reduce their prices?

Lord Bach: My Lords, we feel that competition has an important part to play in the process. Innovation is occurring all the time, and that is good for the consumer.

Lord Geddes: My Lords, is the noble Lord aware of the report of the European Union Committee of your Lordships' House? If he is not, I draw his attention to it. The report was conducted by Sub-Committee B, of which I had the honour to be a member, and investigated this subject in considerable depth. It is well worth reading.

Lord Bach: My Lords, I cannot promise that it will be my weekend reading but I will read it very soon.

Lord Mitchell: My Lords, we must take some great satisfaction from the fact that prices have been reduced throughout Europe on mobile phone usage. Are there any plans to repeat those reductions with respect to data and SMS texting?

Lord Bach: My Lords, I think there are such proposals. The Commission has made it clear that it is monitoring the costs of short messaging and multimedia messaging services offered by the phone companies. If the prices charged for such services while abroad do not come down, the Commission is likely to propose a regulation along the lines of the mobile roaming regulation. We would have to see the precise terms of that proposal before we took a view.

Viscount Montgomery of Alamein: My Lords, does the Minister agree that the extensive use of text messaging has had a most damaging effect on the use of proper English, spelling and grammar, and that this is particularly dangerous for young people?

Lord Bach: My Lords, without agreeing entirely with the noble Lord, I have a huge amount of sympathy with what he has just said.

Baroness Oppenheim-Barnes: My Lords, what particular expressions of satisfaction have the Government received from consumers and consumer organisations on this subject?

Lord Bach: My Lords, I am not in a position to bring before the House any particular letters I might have on file, but it is generally agreed by the Commission, the European Parliament, the British Government and, I believe, consumers who use mobile phones abroad, that the agreement is highly satisfactory.

Baroness Miller of Hendon: My Lords, did the Government challenge the data presented in the Times on 25 October?

Lord Bach: My Lords, the relevant Minister appeared on "Channel 4 News" and made it clear that we consider this to be a successful conclusion. So far as the Times is concerned, if we challenged every newspaper article we would spend our time doing nothing else. The noble Baroness will know that newspapers do not always get it right.

Climate Change: Bangladesh

Baroness Uddin: asked Her Majesty's Government:
	What consideration they and their international partners will give at the forthcoming climate change conference in Bali to the effect of global warming on Bangladesh.

Baroness Royall of Blaisdon: My Lords, the UK's objectives in Bali include pushing for a long-term stabilisation of greenhouse gas emissions. This is a primary concern for Bangladesh, which is one of the countries most affected by climate change. We will also press for a framework for action on adaptation, emphasising the needs of vulnerable developing countries such as Bangladesh. The UK is helping the Government of Bangladesh to prepare their position paper for Bali.

Baroness Uddin: My Lords, I thank my noble friend for her reply. Will she join me in commending the efforts of the aid agencies and the British-Bangladeshi diaspora in assisting in the current crisis? Does she agree that some of the recent calamities in Bangladesh and elsewhere are due to global warming and climate change? Will she assure the House that, in any forthcoming discussion on climate change and global warming, her department will give serious consideration to their impact on the long-term viability of countries such as Bangladesh so that they can defend their land and their people?

Baroness Royall of Blaisdon: My Lords, I am happy to pay tribute to the aid agencies working on the ground in Bangladesh and to the diaspora for the way in which they have rallied round. My right honourable friend the Prime Minister has issued a statement today which pays tribute to many of those people. The Government certainly agree that the recent events in Bangladesh are a result of climate change. It is clear that developing countries are feeling its impact and that it will make their work in tackling poverty much more difficult. That is why the Government are pushing for a way in which adaptation to the effects of climate change can be dealt with at Bali and by the UN in general.

Earl Cathcart: My Lords, will the Government take advantage of the assembled international community at the Bali conference to discuss the international market in carbon credits, which could be used to support countries such as Bangladesh? If so, does the Minister think it important to have in those negotiations a precise percentage for the amount of overseas carbon credits that the Government will allow to be used in meeting the Government's own target for reducing carbon emissions, and what figure does she have in mind?

Baroness Royall of Blaisdon: My Lords, this is of course one of the issues that the Government will discuss with their partners at Bali—it is one of the most important. I regret that the figures that the Government will discuss are outwith the scope of this Question and I do not have them in front of me. However, I shall certainly write to the noble Earl.

Lord Clinton-Davis: My Lords, I recognise the acute anxiety that is caused to the people of Bangladesh by this issue but will the Minister confirm that the shipping and aviation industries are co-operating fully with the Government in their efforts to deal with climate change?

Baroness Royall of Blaisdon: My Lords, the Government are in discussions with the shipping and aviation industries. They will have a profound impact on the way in which we deal with climate change. I hope that those discussions will continue to be constructive, as they are at present.

Baroness Northover: My Lords, given the effect of climate change especially on the poorest countries such as Bangladesh, and on all us through increased conflict and migration, what are the Government doing to assist Bangladesh and other poor countries to include adaptation to climate change in their development plans? Given that adaptation will be addressed in Bali, will disaster risk reduction be central to it?

Baroness Royall of Blaisdon: My Lords, disaster reduction will be part of the discussions and the framework. At policy level, DfID is helping the Government of Bangladesh to develop their national change strategy and their action plan, but we are also assisting them practically to come to terms with the issue of climate change. We are in the process of approving a £30 million programme to address in a comprehensive manner climate change-related issues in Bangladesh. We are also doing many other practical things, such as assisting the Government of Bangladesh to ensure that river island dwellers' houses are put up on stilts or raised earth so that the impact of climate change is much less on them. I am very pleased to report that, in the recent floods, of the 32,000 houses that have been put on raised earth or stilts, only one was washed away. That shows that these very practical adaptations are working.

Lord Judd: My Lords, does my noble friend agree that, on a day when the House is about to debate the vital issue of defence and security, we should all recognise that what global warming is already doing in terms of human suffering, death and destruction amounts to one of the greatest threats facing humanity? It will also have immense implications for future migration across the world. Does my noble friend further agree that it is absolutely right for the Government to make this the priority, above all other priorities, in their approach to policy?

Baroness Royall of Blaisdon: My Lords, I wholeheartedly agree with my noble friend and I am glad that the Government are making climate change a priority in this country with the Climate Change Bill and also on the international scene. This Government, along with such people as the Secretary-General of the United Nations, are pushing for an action programme that will assist developing countries to tackle climate change. This is a global problem and we are treating it in a global manner.

Lord Avebury: My Lords, since the Intergovernmental Panel on Climate Change report was published last Sunday, have the Government had any bilateral discussions with the Government of Bangladesh on the implications for that country, bearing in mind that the IPCC predicts that on present trends some areas of south Asia will be permanently inundated by 2050? Will the Government seek to agree with Bangladesh on more robust targets to be arrived at in Bali?

Baroness Royall of Blaisdon: My Lords, I do not know whether in the past week the Government have discussed that specific issue with the Government of Bangladesh. The Government's priorities during the past week have been to assist them in dealing with the outcome of the cyclone and recent floods. However, the implications of climate change are very high up on the agenda, as is trying to ensure that both developed and developing countries have targets on emissions that must be met.

Alcohol Labelling Bill [HL]

Lord Mitchell: My Lords, I beg to introduce a Bill to make provision for the labelling of alcoholic beverages; and for connected purposes. I beg to move that this Bill be now read a first time.
	Moved accordingly, and, on Question, Bill read a first time, and ordered to be printed.

Business of the House: Debate Today

Baroness Ashton of Upholland: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the debate on the Motion in the name of Baroness Park of Monmouth set down for today shall be limited to five hours.—(Baroness Ashton of Upholland.)

On Question, Motion agreed to.

Armed Forces

Baroness Park of Monmouth: rose to call attention to the planning, action, and support required to enable the Armed Forces to meet the long- and short-term challenges facing them; and to move for Papers.
	My Lords, I welcome the presence here of so many noble Lords, and especially noble and gallant Lords, who can speak with authority and passion about a major national crisis and a major national scandal. We have had many such debates on defence since I entered this House in 1991, but I have never addressed the issue with such a heavy heart nor with such indignation.
	I should not have made planning one of the aims of this debate. The Armed Forces are in the dangerous situation that they now occupy because successive Governments have planned, as in the Strategic Defence Review and the White Papers since 1997, but have never been prepared to provide the funding or to examine the consequences of the commitments into which they have entered. My own party, believing that the collapse of the Soviet regime in Russia had removed the strategic threat, proceeded to close two out of three service hospitals and in 1996 allowed the Treasury to put through the sale of the married quarters estate and a number of other valuable MoD properties, including the drill halls in county towns, which had been a vital part of recruitment. These two acts had continuing adverse consequences for service recruitment and, above all, for the well-being of service families.
	The Government, however, have been in power for 10 years. In that time, the Armed Forces have been continuously involved in interventions—in the Balkans, in Afghanistan twice, in the Gulf twice and in military aid to the civil power elsewhere year after year. Year after year they have been more and more inadequately funded and equipped to do more and more tasks.
	The new defence aim reported to Parliament in 2003 was,
	"to deliver security for the people of the United Kingdom and the Overseas Territories by defending them, including against terrorism; and to act as a force for good by strengthening international peace and stability".—[Official Report, Commons, 3/11/03; col. 432W.]
	Twenty-eight military tasks are recorded, apart from the main mission, and eight subordinate large military tasks in the White Paper. I will read noble Lords the forthright comments of the chairman of the Defence Committee in the other place commenting on the 2003 Defence White Paper:
	"The thing that disturbs me about the whole process is that the process is driven by how much money the Treasury is prepared to allocate to you, and frankly if the Prime Minister wishes to deploy those forces readily around the world, then doing it within the constraints of what might be a diminishing budget appears to me a bit of a fantasy. You either decide you are going to have adequate forces, adequately funded, adequately led, adequately deployed and adequately resourced, or you do not. If there are going to be any further cuts in this Defence Budget, you might wish to see, and we might wish to see, them curtailed because the Treasury once again, as in 1920 with the 10-year rule, has their perception of warfare 10 years from now, which is often based on a delusion and on economic decision-making rather than defence policy-making".
	There have been enough plans, both strategic and tactical. HMG should be acting to maintain forces adequately equipped and trained to deal with the growing asymmetric threat, not least in the now unstable state of Pakistan—a nuclear power where forces are based which constitute a possible threat to our troops in Afghanistan. There are also possible threats from Iran, in terms of fomenting unrest in the Middle East, and jihadism based in Saudi Arabia. We cannot discount possible action from Russia in terms of interventions supporting Iran's nuclear ambitions and Syria's possible intentions in Lebanon and Iraq.
	Russia, which is rearming extensively—its defence budget for this year is £16 billion and it is reported that a £94 billion programme for rearmament is planned—remains an important player by proxy in the Middle East. Russia no longer considers itself bound by the Treaty on Conventional Armed Forces in Europe. An ominous response has been the reported move by Poland's new Government to consider withdrawing from their commitment to allow the US to base part of a missile defence system in Poland. Russian officials are said to have given warning that the US plan could lead to a new arms race.
	Much will depend on the EU's readiness to stand up to Russian bullying. If we indeed regard our commitment in Afghanistan as open-ended, we must expect some years of military commitment and the possible escalation by pro-Taliban forces to gain control in Pakistan. Our NATO allies in Europe, never in most cases very robust, will gradually fade away.
	We do not know what call may be made on our military resources to fight an asymmetric war, to protect our borders, to protect the integrity of UK waters and airspace, to support the civil power in times of flood or internal unrest or to carry out disaster relief, as we come to the succour of Commonwealth countries in emergency. All those possible tasks are recognised, with many others. Incidentally, I wonder how much of the €10 billion Galileo is now going to cost—the original estimate was €4 billion—we shall have to pay.
	All these possible tasks are recognised, but who will carry them out and with what training and equipment? We have commitments to the EU, the AU, the UN and NATO. Parliament, through the Defence Committee, the Public Accounts Committee and other respected bodies, such as the National Audit Office and the Armed Forces Pay Review Body, has repeatedly warned over the years that our defence capability is at serious risk. Still the Treasury and the Government continue to starve the forces year after year, while the Government continue to pile more tasks on them. The MoD itself has been far from blameless. Even at this critical time, when not a day passes without more reports of serious overstretch—aircraft which ought not to be flying, a shortage of helicopters because there are no instructors, let alone an absolute failure in the duty of care—the MoD this week says that it intends to publish a White Paper on service personnel next spring. It will,
	"take stock of policies affecting the Armed Forces and set out our plans to improve conditions",
	and move to encourage recruitment. Once more it is jam tomorrow, never jam today. Both strategically and practically, the defence of the realm is in greater danger than for many years. There is one major cause and one single remedy—resources, both human and financial.
	It is now widely admitted that the military covenant is breaking down. Because so many noble and gallant Lords are here today who can speak with authority on the military issues, I shall concentrate on the duty of care. That has been for too long ignored. The Government are prepared year after year to use and exploit our Armed Forces but not to pay them fairly, whether in money, decent quarters or security for their families, nor to provide enough equipment for satisfactory training. Three major bodies, the Public Accounts Committee, the Defence Committee and the National Audit Office, are unanimous in stating the urgent need for the human needs of the troops and the families to be addressed. The Armed Forces Pay Review Body quotes the Chancellor's view that pay settlements should be guided by the 2 per cent CPI inflation target and "affordability" within departmental resources.
	The Secretary of State for Defence emphasised that affordability was a key concern in determining the pay award. A "fair pay" award needed to be set against the MoD's priorities for targeted measures. The NAO's report on recruitment and retention identifies the crucial pinch points, including, incidentally, the severe lack of doctors; without the Territorial Army I do not know what we would do. The defence White Paper sums up the policy as,
	"the same military effects to be achieved with less".
	The MoD today is working within the 2007-08 defence budget, which was set in 2004. Pay recommendations which exceeded provision—that is, above the "affordable" 2 per cent—would threaten other objectives, yet operational demands on serving soldiers have greatly increased. The Government must understand that they are not dealing with a piece of equipment but with that indispensable item, human beings, who cannot postpone living for five years to suit the budget cycle.
	Unfortunately, as the White Paper recognises, network defence capability,
	"will only work when employed by highly trained professional forces".
	There has to be investment in equipment and systems, but also in training the people who operate them.
	The redoubtable Lizzie Iron, then chairman of the Army Families Federation, wrote in 2004 to the then Under-Secretary of State, having presumably been told yet once more that there was no money:
	"You emphasize the importance of up-to-date equipment, but without soldiers to operate it the best kit in the world will not make an effective army".
	Mounting political commitments are making it impossible to train the forces to wage high-density warfare, which is their primary military task and one which cannot be achieved at the last minute. Our defence forces are not primarily a political weapon, and neither the Treasury nor the FCO are the right people to make the strategy. Action is needed before it is too late to address the military tasks and needs of the defence forces, and, incidentally, to complement our seriously attenuated military capacity by restoring some of the worldwide diplomatic presence we once enjoyed. This not only nourishes our relations with other countries and promotes our trade, but has provided safe bases for our intelligence gatherers and the means to negotiate naval bases when they are required in emergency. They also forewarn us of threats.
	As regards support, I need not reiterate to noble Lords the importance of the military covenant between our fighting forces, a citizen army of volunteers and the nation, and the way it is being breached. When we address the needs of the defence establishment we are dealing not only with the men and women serving in the Armed Forces, but with their families, whom they are not here to care for. It is a major constituency which has no MP and has major problems, not least the disgraceful state of much of the housing. The forces see support for their families in housing, health and related areas as the clear manifestation of whether we mean it when we say that the country has a major asset and that people are important. The service families, whose steadfast support for those who are serving away from home and whose approach to their own problems is both practical and brave, need to be recognised and rewarded. The covenant is that the forces fight for us and we help their families when they need it most. Yet year after year the families live in very often disgraceful conditions. Their needs are ignored, and year after year promised funding for housing does not materialise because it has been diverted to some other "more important" objective.
	In the families federation report for 2002, housing problems accounted for 25 per cent of all calls for help and action. One example of the failure to provide support was the cancellation, on grounds of cost, of a promised rebuild of an estate where families were living in terrible conditions. The DHE said it had no money, and nothing was done. At the 2004 conference of the federation, a main issue was housing. In 2007, the dominant issue is housing.
	The admirable Royal British Legion, to which I am indebted, makes two important recommendations; that the local connection rule, which discriminates against ex-service families applying for social housing, should be removed at once, and that there should be ring-fenced, affordable housing for veterans where MoD land has been given over for housing development. The Treasury should not be allowed, as it is reported to be doing, to sell off a helicopter base and an RAF training base to raise money at this critical time.
	I am indebted to the legion for the statistics that I now cite and for some of the recommendations. The legion deals with 4.8 million veterans, with an average age of 64, the majority of whom, 83 per cent, served in the Armed Forces. There are 3.6 million adult dependants and 1.7 million children. Of the 189,000 troops and 200,000 reservists serving in the Armed Forces, 18,000 are women. There are 1.3 million widows or widowers. We are dealing with a great number of our citizens. Harmony guidelines on separation, which are a major concern of both the NAO and the Armed Forces Pay Review Body, are frequently breached for large parts of the services, often with serious effects for marriages.
	The legion is fighting many battles; here are some of them. Sadly, one large group of veterans, the 1991 Gulf War veterans, have had a long battle for fair treatment, which has often been debated in this House. About 7,000 finally received compensation payments, but those veterans should also receive an ex-gratia payment. More research into the result of the war pensions review for Gulf War veterans is needed. The onus should be put on the Government to prove that the service was not responsible for causing or worsening an injury or illness when compensation claims under the Armed Forces Compensation Scheme are being considered. The Government should also remove the time limit on claims under the AFCS, including the five year cut-off point. The legion urges—recent examples of this have been publicised—that there should be full compensation for each and every injury sustained in a single incident.
	The Government should pay for the accommodation of families of injured service personnel, whose presence is an important part of their treatment and rehabilitation. We have all read about the new accommodation that is to be built by the SSAFA from charitable funds, including money raised by a national newspaper, for the families of those being treated for severe injuries at Headley Court. That should be public money. At last, we have a long-awaited dedicated military ward at Selly Oak, and excellent work on post-operational stress and trauma is being piloted and evaluated at the King's Centre for Medical Health Research. We now need a regime of surveillance of those who have been deployed for long periods and who may be vulnerable to mental health problems. We are building up great trouble for the future if we do not do that.
	Resources must be made available to ensure that priority treatment for veterans by the NHS is delivered. That right was established in 1953, but it is now no longer effectively provided or, if it is provided, it is much delayed. The legion makes a strong case for health surveillance in the services. There needs to be proper access, as the NAO urges, to resettlement services for those who are retiring, and mandatory vocational assessments should be provided. Those who are leaving the forces are, incidentally, potentially extremely valuable to civil society.
	The legion is concerned, as we should be, about veterans and their dependants living in poverty, for whom we have a continuous duty of care. It urges the Government to improve disabled facilities grants. That scheme should be better funded. The legion has often to step in and fill the gap. It urges that war pensions should be uprated in line with earnings from 2008, in advance of the proposed changes to the uprating of state pensions.
	We have to recognise that service families cannot but be dysfunctional when the head of the family is in action abroad and/or is prevented by overstretch, and by the consequent failure to observe harmony guidelines, from seeing his family. He and they lose out in almost every area of life because of that separation when it lasts too long. The legion urges that servicepeople who were mis-sold endowment mortgages by UK firms when posted abroad should have access to compensation schemes, as those in the UK do. Not least, there is strong pressure to clear the present backlog in military inquests and for service families to be provided with legal advice and advocacy at public expense in those inquests.
	I see that I have a little more time and shall be happy to recount something that I missed out. It is about the Treasury, my favourite subject, and an incident some years ago that some of you will remember, when the contract for the complex updating of the Tornado and the Hercules had to be placed with an incompetent, inexperienced small contractor because the tender was the lowest. The resulting damage to the aircraft by that firm was discovered, fortunately, by the RAF when the aircraft were returned to St Athan before proceeding to operational service in the Gulf. The RAF found that such damage had been done that if those aircraft had flown, they would have crashed. Not only would we have lost the aircraft, but the crews. I suggest that this was one of the occasions when it is rather important how we judge what savings are. The Treasury does it with money and figures. We should be doing it with human lives.
	I return to my speech, which is nearly finished. The defence strategy that the services are expected to carry out without enough equipment, without enough training time and with little regard for the whole life of a soldier, is like a householder who buys an expensive microwave on the instalment system but fails to give his wife any money to buy the food or the chance to learn to cook. No one doubts the high morale of our forces in the field, made up of comradeship, courage, pride in their profession and battle skills, and their families do all they can to support that morale. Nevertheless, a stretched elastic can break. We know from the NAO that the impact of service life on family life and the feeling that the work of the services is no longer valued accounts for 65 per cent of the reasons for leaving. The NAO and the Armed Forces Pay Review Body are concerned about the increasing breaches in harmony and the steady loss of essential skilled personnel serving at the pinch points.
	It is in the interests of the country as a whole, not just the defence family, to deliver proper care and support to a significant part of our people who are engaged in the defence of the realm. The noble Lord, Lord Chalfont, in a defence debate quoted Thucydides on the importance of morale. The noble Lord also quoted Field-Marshal Montgomery when he spoke of the importance of a contented Army and said,
	"the morale of the soldier is the greatest single factor in war".
	I beg to move for Papers.

Lord Craig of Radley: My Lords, I congratulate the noble Baroness on securing this debate and on a powerful and telling speech. She mentioned the military covenant whose words I would like to quote. It states:
	"Soldiers will be called upon to make personal sacrifices—including the ultimate sacrifice—in the service of the Nation. In putting the needs of the Nation and the Army before their own, they forego some of the rights enjoyed by those outside the Armed Forces. In return, British soldiers must always be able to expect fair treatment, to be valued and respected as individuals, and that they (and their families) will be sustained and rewarded by commensurate terms and conditions of service ... This mutual obligation forms the Military Covenant between the Nation, the Army and each individual soldier; an unbreakable common bond of identity, loyalty and responsibility".
	The same covenant must apply to all three services in equal measure. Do Her Majesty's Government accept that, too?
	Every day individual servicemen and women on operations overseas are making personal sacrifices—and some the ultimate sacrifice—in the service of the nation. Since 2003, some 257 have been killed in action. Larger numbers have been wounded, some most horrifically, but thanks to their medical treatment they live—albeit severely disabled in many cases. Others who have no physical disabilities are traumatised by their experiences and may never be well again. Almost all are young, in the first few years of their adult life; some not even out of their teens. No one can claim that today's service men and women are not fulfilling their part of the covenant, as also did the 16,000 who have died since World War II on operations and whose names are recorded on the Armed Forces Memorial in Staffordshire.
	How are the Government and the nation responding? How well are they keeping faith with their responsibilities to so many service personnel and dependants in this contract? Keeping faith is not just a matter of financial reward for a job well done. It must go deeper to uphold this unique contract. The Royal British Legion recently launched a well researched campaign drawing attention to government failings in meeting the covenant. There is more to add.
	No amount of repetition of respect and admiration for the Armed Forces will outweigh the impact of government inactions or perceived disinterest in the activity and feelings of service personnel. Do the Armed Forces not merit even one line in the gracious Speech when they are deployed on operations far from home? Where is the support in that? It hollers blinkered disinterest.
	How can the Armed Forces feel that the Government are four-square behind them with both the Secretary of State and the Minister for defence equipment and support only part-time holders of their important positions? A part-time Minister signals a part-time interest in the forces, a part-time responsibility for representing their interests in Cabinet and failure to get adequate funding in the CSR settlement; a part-time Minister, with key responsibilities for their equipment needs, being answerable to two Secretaries of State. Surely a son of the manse knows his Bible: "No man can serve two masters". Does all this not undervalue the Armed Forces?
	I welcomed the Written Statement, 10 days ago, by the Secretary of State for Defence. This promises a Command Paper on what has been done to support service personnel, their families and veterans, and the Government's vision for further support. But this work is not going to be published before spring 2008. Is that the best that a near-invisible Secretary of State can do, tied up as he must be with the problems of Scottish devolution and talk of independence? Can the Minister assure the House that there are funds earmarked in the defence budget to meet the cost of the further support that seems to be anticipated by the Statement? Or is this vision of further improvements just spin, no more than a virtual mirage on a far-off shore?
	Ministers have repeatedly acknowledged that we are committed—and have been for some time—way beyond defence planning assumptions. Admitting it, but then doing too little to correct the situation, or only belatedly, is another example of a failure to fulfil their part of the military covenant. In wars of choice, is it not highly immoral to commit forces that are underprovided and inadequately equipped for their tasks? A Government must limit their global aspirations to what they have provided the services, or they fail to honour the military covenant.
	The noble Lord, Lord Drayson, made a belated apology to your Lordships for failings in MoD treatment of Gulf War I veterans. He said:
	"I accept on behalf of the Ministry of Defence that this issue has not been handled well from the beginning. The department was slow to recognise the emerging ill health issues and to put measures in place to address them".—[Official Report, 11/10/07; col. 341.]
	But the Minister for Veterans still refuses to accept the Pensions Appeal Tribunal determination that Gulf War Illness is a valid label to merit compensation for sick veterans from the first Gulf conflict who do not have an established pathology.
	Gulf veterans who have had their claims refused should be contacted by the MoD and told that they can appeal if they have not already done so. This would be the least that the MoD can do to make good on its admitted failings and to bring this long-running issue to a satisfactory closure.
	I was encouraged to learn that the Hull Teaching Primary Care Trust has written to its healthcare professionals to say that, in addition to fast-tracking treatment for veterans in receipt of a war disability pension, other veterans should be given the same access as the war pensioners if their doctors suspect that their condition may be associated with their military service. Can the Minister confirm that fast-track treatment is a nationwide arrangement—throughout the United Kingdom—for all veterans? Indeed, does fast-track treatment mean giving priority to treatment?
	A number of your Lordships challenged one of the critical changes introduced into the new Armed Forces Compensation Scheme 2005. As the noble Baroness, Lady Park, mentioned, the scheme requires the claimant to prove, on the balance of probabilities, that the injury, illness or death was caused mainly by service. Under the former war pensions scheme, in place since 1942, the onus was on the Secretary of State to prove that conditions were not caused by service, and the service person was given the benefit of the doubt. This change disadvantages serving personnel and veterans in poor health, who may be ill prepared to argue their case in any dispute over the cause of their injuries. What an inappropriate time, when we have casualties almost daily, to impose such a change designed, it seems, to save money on compensation.
	I have not completed my list of concerns, but I hope that I have said enough to challenge the Government to mend their ways. There is a world of difference in dealing with service personnel as though they were comparable with non-combatants when so many are now serving in operational environments. It is an abrogation of the Government's responsibilities under the covenant. Let them resolve instead to sustain it wholeheartedly, and not just by grudging, belated responses to media and other pressures that embarrass them.
	The military covenant is not only between the forces and the Government of the day, it is between the forces and the nation. I have remarked before in debates how impressed I have been by the willingness in the United States to honour and reward service men and women and veterans. If they produce their service identity card, most retailers will willingly give them a discount on their purchases. Would that our national businesses would do the same for our Armed Forces. How better could they indicate their support for the military covenant? Will the Government take that idea forward?

Lord Chidgey: My Lords, the noble and gallant Lord, Lord Craig, has made a telling contribution to this debate based on the wisdom of his own experience, on which we should dwell throughout the hours to come. I am sure that your Lordships' House will want me to pass on good wishes for the speedy recovery of my noble friend Lord Lee of Trafford, while he recuperates in hospital. He will be disappointed not to be here today to follow the speech that he made in the debate on the gracious Address when he focused on the key issues, as appears to be well known.
	From almost every quarter in the defence and security world, whether from defence analysts, think tanks and institutes or military personnel, warning bells are ringing. There are growing concerns that our Armed Forces are unable to sustain the tasks required of them to respond to government policy. The noble and gallant Lord, Lord Craig, made the point that the covenant with the Armed Forces is an essential part of our relationship with them. If we choose to have Armed Forces that are prepared to engage in this difficult, tough and challenging campaign—to be war fighters as well as peace makers—then, in recognising that this is a new situation for our Armed Forces, we must recognise that new commitments are necessary to make it work and to make it fair. The covenant between the Armed Forces, the Government and the people must be renewed. For our part, in government, our former Prime Minister said that it will mean increased expenditure on equipment, personnel and the conditions of our Armed Forces—not in the short run, but for the long term.
	That is the nub of the debate today: whether the commitment made by our Government on behalf of the nation, and subsequently endorsed by both the former and current Prime Ministers is being met in reality. An increasing body of informed and expert opinion is telling us that it is not. British forces are now suffering critical overstretch due to the mismatch between resources, capabilities and commitments. They were suffering even before the Iraq war and, we are told by many, are now stretched to breaking point. For example, General Sir Richard Dannatt said in July:
	"The enduring nature and scale of current operations continues to stretch people ... we now have almost no capability to react to the unexpected",
	and that reinforcements for emergencies or operations in Iraq and Afghanistan are now "almost non-existent".
	That was in late July, and of course the Government may well now claim that the situation has moved on, with troops being withdrawn from Iraq and reinforcements being deployed in Afghanistan and so on. But the bald facts, according to the RUSI Acquisition Focus of spring 2007, are that the Government's defence planning assumptions, on which the defence budget is based, have been exceeded for at least the past seven years. Experts will of course tell us that it does not matter too much if we exceed the planning expectations for maybe one or two years. But this has been a continual problem for at least seven years, which suggests that our lack of capacity to react to the unexpected or emergencies is not just a one-off but is becoming systemic and endemic.
	It is almost 10 years since the Strategic Defence Review in 1998 set out the Government's vision for the future. Since then, global security has changed significantly, particularly following the terrorist attacks of 2001, the resulting wars in Iraq and Afghanistan against the Taliban, and the campaigns against Osama bin Laden and al-Qaeda across the region. Those are in addition to our continuing roles in the Balkans, Bosnia, Africa and Sierra Leone and, more widely—as the noble Baroness who introduced this debate said—working with the EU, the UN and AU peacekeeping efforts.
	Although the SDR was largely welcomed at the time, the global security situation has moved on; added to which, many of the problems that the SDR was supposed to solve—a posture more suited to the Cold War, undermanning and overstretch—remain a major concern today. The SDR set broad benchmarks that visualised, for example, either a response to a major international crisis that might require a military effort and combat operations of a similar scale and duration to the Gulf War—I am advised that, in broad terms, that means deploying an armoured division, 26 major warships and more than 80 combat aircraft—or undertaking a more extended overseas deployment on a lesser scale, as in Bosnia, for example, while retaining the ability to mount a second substantial deployment, probably involving a combat brigade and appropriate naval and air forces, if this were made necessary by a second crisis. The SDR did not, however, expect both deployments to involve war fighting, or to be maintained simultaneously for longer than six months.
	In that context, it is worth emphasising the point made by my noble friend Lord Ashdown in a recent article, that only one twenty-fifth of the troop numbers and one fiftieth of the amount of aid is being put into Afghanistan per head of population than we put into Bosnia and Kosovo. Yet the war in Afghanistan is seen as the conflict in which we must succeed if we are to contain and defeat international fundamentalists launching their terrorist campaigns across the world. It is therefore worrying to see reports in our national papers that, according to the MoD's own performance report, almost half of Britain's forces are ill prepared to be sent on operations because of equipment shortages; this in spite of the MoD's previous rebuttals of claims from the military that even troops training for Iraq or Afghanistan have inadequate equipment.
	I hope that the Minister will address the claims that paratroopers preparing to go to Afghanistan in April have only half the required number of Challenger tanks and Land Rovers fitted with machine guns available for training. Will she respond to claims that the report states that 42 per cent of UK forces have critical or serious weaknesses in their ability to be ready to deploy and that 35 per cent stated that they could not even be certain of meeting their basic peacetime requirements?
	A further concern has to be that, in spite of reassurances from NATO Secretary-General Jaap de Hoop Scheffer, the tensions between members over the mission in Afghanistan have not been resolved and still threaten progress. It transpires that at a recent meeting of NATO defence Ministers in Holland, up to nine nations might have offered to increase their contributions to the mission in response to US pressure, but there were no responses to the call from the US for major reinforcements. In fact, the possible offers appear to be of more soldiers to help train the Afghan national army, not of troops to take on the war-fighting aspects of the mission. Countries such as Germany, France, Italy and Spain continue to be constrained by what are called national caveats, which restrict their forces to non-combatant roles away from the war-fighting zones. These are political decisions that they should surely find increasingly difficult to sustain, particularly when time is running out to get the mission right and when reconstruction is progressing more slowly than hoped and the Taliban are regaining some hold in the south, in parts that the Afghan national army is as yet unable to protect.
	Reports from the British American Security Information Council—BASIC—last week reinforce that view. They record that, after the NATO chiefs of staff meeting on 14 November, General Ray Henault, the chairman of the alliance's military committee, confirmed that shortfalls in troop levels have slowed progress in Afghanistan. He added that even though forces have grown by 8,500 troops, military commanders are still in need of helicopters and other resources. We need to be reassured that all NATO members are still agreed that the mission in Afghanistan cannot be allowed to fail. It cannot be allowed to fail because not just the future of Afghanistan but also the credibility of NATO is on the line. NATO members must be prepared to provide the means and not just to wish for the outcome. I hope that the Minister can confirm that the Government are sending to our allies the message that all members have an individual responsibility to provide the means to achieve a successful outcome for the good of the alliance, their citizens and the success of the campaign against international terrorism, and that the burden has to be shared or it will become unsustainable.
	In the mean time, our Armed Forces continue to suffer overstretch from unsustainable commitments, inadequate resources, inappropriate equipment and insufficient trained personnel. In that context, the Armed Forces' continuous attitude surveys record that overstretch and frequency of operational tours are now cited as major reasons for service personnel of all ranks deciding to leave the forces. Not surprisingly, there are now acute shortages of qualified personnel in key areas, in particular in military medical services. For example, we have less than 65 per cent of the nurses needed, less than 50 per cent of the surgeons and only 20 per cent of the radiologists. I speak from experience as one who has had every reason to be grateful for the level of healthcare provided by military medical services at Haslar hospital, now sadly closed, and at Frimley Park Hospital in Surrey. I feel very strongly about the need to maintain the morale and capabilities of our Army, Navy and Air Force medical services.
	The impact on the Armed Forces is aggravated by the number of personnel exceeding the harmony guidelines meant to ensure a reasonable lifestyle for our troops. The figure given by the MoD to the Public Accounts Committee in July this year was still around 12 per cent—one in eight—of Army personnel. We would like to hear from the Minister where the statistics are today and how the Government intend to respond more urgently to the eventual loss of these and other key personnel and to restore the covenant with the Armed Forces that is clearly so close to foundering.

Baroness Dean of Thornton-le-Fylde: My Lords, I, too, thank the noble Baroness, Lady Park of Monmouth, for securing this important debate today. I have been associated with the Armed Forces on personnel issues for the past 15 years. My view is that we are at a critical stage in the compact and the relationship with our Armed Forces. We all remember when, under the Administration of the noble Baroness, Lady Thatcher, she had to instruct that a pay increase in double figures be awarded to the Armed Forces because they had fallen so far behind in the years before and that was affecting morale, recruitment and retention. That was a pretty simple and straightforward situation, which should not have been allowed to arise and had to be corrected by more money being found. The situation today is different and more complex, but we come to the same conclusion: more money is needed to help to resolve some of the issues that we have.
	In preparation for the debate, I looked at personnel issues from the time I was a member and chairman of the Armed Forces Pay Review Body and, indeed, the period of this Government's administration. I came to the conclusion that the review body's view that pay is not the key issue is absolutely right. This year, for instance, the review body awarded a 3.3 per cent basic increase, but, because of other allowances, that put 3.9 per cent on the overall wage bill, which is approximately double what the Chancellor of the Exchequer was looking for. The increase was not staged and it was met in full. That was not the case with other pay review bodies, so the particular circumstances of our Armed Forces have been recognised.
	The improvements in the pension scheme that we all considered a couple of years ago are certainly costing money and are a major improvement for the Armed Forces. The removal this year of the 100-day wait to qualify for the longer separation allowance is a major step forward, as indeed was the announcement made by the Secretary of State last year that from April 2006 there will be a tax-free bonus to personnel on operations of in excess of, say, £2,200 pounds. That is all very welcome.
	So, if it is not pay on the personnel side, what is causing what I would regard as a lack of morale—and I do not mean morale on operations; anyone who visits personnel on operations knows that they are more than 100 per cent committed and that morale is high—in the overall feel among the Armed Forces? Why is that so with the current pay situation? With my background, the first thing that you look for when you have that situation is whether pay is too low. If it is not necessarily pay, if, as the review body report says, between April last year and October we saw a doubling of the money deficit to well over 3 per cent, and if we have in the past year—2006—seen nearly 6 per cent of personnel in what are called general ranks leaving and nearly 4 per cent in officer ranks leaving, we have to do something about that. The situation is unsustainable, not only in the long term, but in the short and the medium terms.
	I remember when we were dealing with overstretch. Every one of the review body reports in the past 15 years has referred to overstretch. The MoD has had difficulty accepting that word; indeed, we tried to find other words to put the same case across. When considering overstretch and the time between operations, you are looking at the services as a whole, but that is misleading. You have to hone down into the operational services, which are only a proportion of that. Dealing with overstretch in overall percentages is in my view very misleading.
	We are having problems with recruitment, although I must say that the MoD's method of marketing and recruitment has improved beyond recognition. I know that people are attracted to join the services when we are on operations. That is good, but we are missing out on younger people joining the services in the same numbers as they did. Perhaps for the first time for a very long time, we have our Armed Forces working in what are called operations but which I regard as a warfare situation. We are having to become used to reading and hearing on the news every day about people in the Armed Forces being killed. I know that when they sign up, they sign up to the fact that they may have to pay the ultimate price—with their lives—but to have this in increasing numbers in what is supposed to be a peacetime situation is very challenging.
	That spins off on the families, as the noble Baroness, Lady Park, rightly said. I think that that is one of the kernels of the problem, quite apart from the equipment issues, with which other noble Lords will deal. The families issue is increasingly difficult. I entirely recognise that the Government have done many things to improve the situation, but, unfortunately, we live in a changed society. People's expectations are different and what families will now put up with is not what they would have in the past.
	There are areas in which we have not made as much progress as we should. For instance, accommodation is a running sore. The Government have put a lot of money into accommodation, but since 1997 rent for a lot of the lowest grade of service families accommodation has not been increased by the review body. Why? Because it did not feel that it could justify it; it was too embarrassed to ask for it. Since 1998, there has also been no increase in the basic grade, the lowest grade, of single living accommodation. So we are talking about a decade during which some accommodation has been absolutely appalling. That does not detract from the fact that a lot of investment has gone in and a lot of accommodation has improved, but that is no consolation to Armed Forces personnel who, unlike those in many other sectors of employment, are there for only a short time. For many of them, we are promising that we will invest, but they will be long gone before they benefit from that. We found that that was certainly an issue.
	The issue of access to social housing was raised. Personnel and their families move around. On access to health care, dentistry and schools, a lot has been done by the MoD in conjunction with the Department for Education and the Department of Health, but social housing is a real issue. It is a real issue because the £8,500, or just above, that people are now getting as a contribution to buying their own accommodation is totally inadequate and needs to be looked at. There, the MoD will be tied up with the rules on taxes and whether that is a benefit in kind. Ways must be found around that, because the civilian population's access to social housing is also an issue and service personnel are often pushed to the back, so many of them have poor housing when they are in the services and no chance of social housing when they come out.
	I am a vice-president of the War Widows Association. We thought that we had a diminishing number of members, but that number is now going up. We are concerned—we have discussed this with the MoD, although it is not totally its responsibility—about the delay in inquests and the whole issue relating to coroners' courts. We are discussing that with Ministers at the MoD and will continue to raise it.
	During the past couple of weeks, I have been in the United States, where I came across a disturbing situation. I met in a café what I thought were a load of bikers. One of them had the word "Patriots" on his motorbike. We asked what that meant and he said that, in the States now, when bereaved families are burying members of the Armed Forces, there are demonstrations at the funerals against those people having ever gone to war. Service personnel have no control over being sent to Iraq or Afghanistan, where some of them are killed. Their families then face demonstrations against them. The bikers were forming a protective barrier. Thank goodness we do not have that here. However, I know that our Armed Forces personnel and their families are criticised quite severely in the local pub or in their own town.
	I was delighted last night not by the outcome of the football match, although I know that the Minister is a football fanatic, but to have those 30 personnel at Wembley. We need to show more public support for our Armed Forces and I very much welcome the statement by General Dannatt in that regard. We in this House have a role to play in that support.
	I ask the Minister to take the following into account in the Government's considerations. In the Falklands conflict, defence was apparently 5 per cent of GDP. It is now 2 per cent. Improvements that have been made since then for Armed Forces personnel have been taken from the general budget. I know that departments have to manage their budgets, but they cannot carry on doing that. In the current review, there needs to be recognition that the defence budget must increase and that an appropriate proportion of that needs to go to Armed Forces personnel and their families. Otherwise, the situation is unsustainable in the short, medium and longer terms.

Lord King of Bridgwater: My Lords, I too congratulate my noble friend Lady Park on her excellent choice of debate for the House. I am particularly pleased to follow the particularly powerful and extremely well informed speech by the noble Baroness, Lady Dean of Thornton-le-Fylde, to which I shall refer in a moment.
	It is two weeks since we debated defence as part of a jumbo debate that included foreign affairs and everything else under the sun. Noble Lords will recall that there was a sense of shock when the Minister who was due to open that debate suddenly disappeared at an hour or two hours' notice and the noble Baroness, Lady Taylor, bravely stepped into the breach. We have now had a chance to reflect on the situation and on the views that were expressed in that debate. I expressed my concern, following the comment that I had heard made by others, that our present Prime Minister was not interested in defence. Obviously we shall judge as we see and as it proceeds, but he has made a disappointing start. In my judgment, he has lost the two best Ministers that he had in the Ministry of Defence. I am sorry to see the departure of Mr Adam Ingram, and I am particularly sorry to see the departure of the noble Lord, Lord Drayson, who I thought was an excellent Minister, as did many noble Lords.
	It is being said in the Ministry of Defence and certain other quarters that this is the weakest defence ministerial team that they can remember. It is for others to make that judgment, but I must say yet again that, as other noble Lords have felt, it is almost an insult to our Armed Forces and a grievous mistake by the Prime Minister, as I have said twice before in this House, that at a time of such a test for our Armed Forces and the dangers that they face the Secretary of State for Defence is thought to have plenty of time to double-hat himself as Secretary of State for Scotland. I hope that someone will recognise that at last and do something about it.
	I was not there myself and I hope that I am not quoting him out of turn, but I understand that someone asked the Chief of the General Staff whether soldiers currently notice what is happening in the ministerial team, and was told, "Yes, they do". That answer does not surprise me at all. If they do not appear to be getting the attention and respect in the ministerial team, the soldiers will draw their own conclusions. Does this really matter? There are times when it has been pretty peaceful, when it would not really have mattered very much and when weaknesses in the ministerial team might not have been a critical factor. The noble and gallant Lord, Lord Guthrie, fairly said that the Armed Forces are now busier than at any time since the Second World War. On the scale of casualties, I received, as other noble Lords may have done, a letter from Major General Webb-Carter, the controller of the Army Benevolent Fund, in which he said:
	"We are facing a surge of need resulting from current operations and we forecast that need continuing for many years".
	He recognises that,
	"the State can only do so much so the ABF steps in to fill the gap. It is of note that the public contribution to the Falkland Islands Campaign was £11.5 million"—
	that was in 1981-82 pounds—
	"but to the current Iraq campaign a mere £300,000, reflecting the unpopularity of this conflict in the public mind".
	This is a tragic situation, and is exactly what the noble Baroness was referring to.
	When we know, as Major General Webb-Carter says, that:
	"The average casualty rate of a battalion in Afghanistan or Iraq can be up to 14 per cent"—
	the noble and gallant Lord, Lord Craig, has already spoken in this debate, and I think I am right in saying that the casualty rate in the first Gulf War was 0.2 per cent—that just shows the severity, challenge and much greater danger faced by our Armed Forces.
	I know the answers that we will get or in part can anticipate. We shall be told that the defence budget has gone up by 1.5 per cent in real terms. I hope the Minister recognises—I hope that she has been long enough in the job to know—that that answer fools no one. Everyone knows that the defence index runs at a significantly higher level than that; the noble Baroness, Lady Dean, has made that argument for me. I agree very much with what she said about morale. On the front line, led by good determined officers with a regimental spirit and all that, morale will always be good. I hope that we shall never see that change. However, what happens to those officers who have played their part on the front line and then come home only to leave under the pressure of family or unhappiness? Damage can be done.
	I have tried to be bipartisan because we are talking about a national asset that must be handed on intact from Government to Government. Whoever is in power, we depend on and must have strong and capable Armed Forces. I remember that one of the most difficult things in the first Gulf War was doing a proper battle damage assessment. The difficulty now is to do a proper damage assessment of what is actually happening to our Armed Forces. Someone made the very telling remark that it is very difficult to recognise the brink until it is too late. We are very close to that situation. We are in a very dangerous situation when the Chief of the Defence Staff says that it is unrealistic to think that we could take on any other commitments at the present time because there is no reserve, and that it will take a significant period to recover from the position that we are in. I hear the Foreign Secretary newly and bravely in his job saying that one of the arms of his policy will be hard power, as though it is some sort of electricity supply that can simply be turned on and is limitlessly available, when realistically no hard power is available at the present time for anything else except trying to deal with the two current crises.
	I ask again whether this really matters, but we are living in a serious and dangerous world. At the end of the Cold War—the noble Baroness, Lady Park, referred to this—there was a strong feeling during the Options for Change programme that people were looking for a peace dividend. They were saying, "That is the great threat that we have been facing for the past 45 years, and now we can relax". I remember that the questions from the Opposition Benches in the House of Commons when I made the defence Statement were not about why we were cutting our Armed Forces but why we were not doing a lot more, why the peace dividend was not bigger, and what threat we thought we were facing. As the 1990s progressed, we progressively saw greater dangers emerging.
	More subsequently, I, like the Minister, was involved in the Intelligence and Security Committee. Our reports consistently said that the world was becoming a progressively much more dangerous place, not a safer one, after the end of the Cold War. Against that background is the present stand-off between Russia and the United States, to which the noble Baroness, Lady Park, referred, on the defensive missile shield, and the increasing determination of Russia to flex her muscles. People are now talking about energy security and food security. This may be the first year—it is certainly a developing trend—in which the world has eaten more food than it has produced. We are rapidly approaching the moment at which the world consumes more oil than it can produce. The potential tensions of that and the population explosion in certain parts of the world, along with climate change, may be making certain parts of the world virtually uninhabitable. I do not want to be too apocalyptic, but all this certainly results in a number of risks that any sensible and responsible Government would need to take very seriously.
	Let us look at NATO and the difficulty of getting our allies to step forward and share in some of the challenges we are facing. Noble Lords may well agree with a quote I heard: "The more Europe talks of defence, the less it is willing to spend". Against that background, therefore, I believe that our defence provision is now seriously out of balance with the challenges we face.
	I have every sympathy for the Minister. She is an experienced parliamentarian, but as everyone in the House knows, she has been doing this job for precisely two weeks. She has taken on an incredibly tough assignment at an extremely difficult time, with responsibility for the procurement budget, the scope of which she may only just be beginning to grasp. If, as I understand, she is in charge of procurement, that budget is worth £9 billion a year and is therefore not something that has been particularly within her area of experience until now. We understand the difficulties that she has to face, but Members of this House have a responsibility to speak as clearly and loudly as we can.
	A certain Minister in this House—I will not say who it was—had been fairly recently ennobled and was then invited to the join the Government as a Minister in the Ministry of Defence. His Secretary of State said to him, "I'll tell you the good news and the bad news. The good news is that you are going to the House of Lords. It is a nice place and the people are polite. They will be much nicer to you than they would be in the House of Commons. The bad news is that in the House of Lords you have more people who know more about the subject of defence than anyone we have to face in the Commons". If that is right, my message is simply this. The noble Lord, Lord Chidgey, referred to the previous Prime Minister's speech made on HMS "Albion". At the very end of his farewell tour, the penny dropped that defence needed a lot more effort and expenditure. Indeed, the noble Baroness, Lady Dean, has referred to the challenges.
	I have only one request for the noble Baroness, Lady Taylor. She will do her best and as a good parliamentarian will wind up this debate and answer the arguments successfully. I would like her to do one thing, if she will. Will she make sure that a copy of Hansard for this debate goes to the Prime Minister and that she encourages him to read it? Then—because I believe he claimed that this would be a listening Government—he might like to talk to a few of the contributors and see whether we cannot find a way forward. We need to get him to understand the seriousness of the situation. I say this as someone who cares deeply about our country, our Armed Forces and the threats that we face in the world. If we do not face up to this and get a proper bipartisan approach to tackling these challenges, I will be seriously concerned about the future.

Lord Boyce: My Lords, I too welcome this debate. It allows me to pay tribute to all our armed services for the outstanding work they are doing, not only in Iraq and Afghanistan but also all around the world. They are rightly admired in all quarters for how they go about their business, whether it is war fighting, peace keeping or defence diplomacy, and this country derives huge hidden benefits from that in all sorts of ways. In particular—this can be inferred from the speech of the Minister in the debate on the humble Address—when this Government have been sitting at various international top tables, they have been especially pleased to bask in the glow of the fine reputation of our Armed Forces as they have engaged over the past 10 years in levels of activity that far exceed defence planning assumptions. But I am afraid that the merciless trading on the good will and professionalism of our soldiers, sailors and airmen has not been matched by anything remotely approaching the same level of commitment by the Government in cash or in kind.
	We see this best when observing the deflation of the defence budget as a percentage of gross domestic product versus inflation in activity against the assumptions of our defence policy, and inflation in the cost of defence equipment, which is running at something in the order of 8 to 12 per cent. And the so-called year-on-year increases that the Government continue to boast about have first to be measured against the initial under-funding of the defence aspirations set out in the Strategic Defence Review. It is an absolute fact that none of the year-on-year increases has closed that initial gap, let alone provided for the concomitant rise needed to match the soaring levels of activity which are taking a matching toll on man and machine.
	As for the derisory Comprehensive Spending Review settlement that defence was given in July, let us examine the detail of that 1.5 per cent budget increase that the Government were so pleased to announce. First, the Minister will no doubt be extremely reluctant to remind us that the replacement strategic deterrent will have to be absorbed into that 1.5 per cent. This really does display a cynical observance of the promise made by the then Prime Minister that the cost of the Trident replacement would,
	"not be at the expense of the conventional capabilities that our armed forces need".—[Official Report, Commons, 4/6/06; col. 23.]
	I said in this House at the time of the debate on the nuclear deterrent replacement that:
	"We will have to examine the outcome of the Comprehensive Spending Review with great care to see whether the Prime Minister has kept his word".—[Official Report, 24/1/07; col. 1163.]
	I leave your Lordships to draw your own conclusions. But further to this, can the Minister confirm that the ring-fenced defence modernisation fund and the operational welfare package benefits that the Secretary of State for Defence was trumpeting about in last week's Sunday Telegraph are also to come out of that 1.5 per cent? I submit that they are, and the fact is that the smoke and mirrors work of the Government, and in particular the Treasury, actually means that the core defence programme has had no effective budget rise at all. If one could cut to the truth, which is a really challenging task, we would find that it is in fact negative, especially if one extracts the £550 million to be spent on slum accommodation that should have replaced years ago.
	This negative budget is why, if you go to the Ministry of Defence today, you will find blood on the floor as the system slashes the defence programme to meet what is a desperate funding situation. You will find—I know this—measures being examined to cut the future equipment programme, as well as reducing the present front line and its support. I fear in particular for the Royal Navy, where already the destroyer/frigate force level has haemorrhaged to 25 from the required 32 set out in the Strategic Defence Review of nine years ago. It seems that further reductions are likely, and these on a fleet that is still damaged by the savage moratorium on fleet support that was instigated by this Government a couple of years ago and from which, although lifted earlier this year, it will take at least a decade to recover, if at all.
	Incidentally, I hope that the Minister can assure us that the Ministry of Defence is still not clinging to the strategically illiterate opinion that network enabled capability allows for a reduction in basic force numbers. Such a theory, of which Secretary of Defense Rumsfeld was such an unfortunate and dangerous exponent, has been comprehensively trashed by experience in Iraq and Afghanistan. Network enabled capability and force reduction certainly do not apply in the maritime domain where I remain to be convinced that the Ministry of Defence has woken up to the fact that a ship cannot be in two places at the same time, and that the importance of presence, which is so fundamental to conflict prevention, demands more and not fewer hulls.
	On that—if the Minister does not already know, she will find out—this Government have ordered only eight warships since 1997, of which only four were destroyers and frigates. In the same period, 57 ships have been disposed of, of which 13 were destroyers and frigates, the workhorses of the fleet. Some of those disposed of were in fact younger than the ships they replaced. I believe that the destroyer/frigate level is far too low to meet the challenges of the long term. Perhaps the Minister can tell us what is going to happen to Nos. 7 and 8 Type 45 destroyers, and whether the Future Surface Combatant will be brought into service to fill the place of the Type 23s as they start to age out in the next decade?
	On further specifics, such as the equipment for our people in theatre in Afghanistan and Iraq, no doubt the Minister will trot out the line that all they require has been met, as the Secretary of State attempted to imply in another part of his piece in the Sunday Telegraph. However, let us remind ourselves that to achieve this, some £2.2 billion has had to be spent on urgent operational requirements, demonstrating the impoverishment of the defence programme. But what the Prime Minister, the Treasury and Defence Ministers need to realise is that, as the noble Lord, Lord Chidgey, said, we are seriously endangering our people because of the lack of money being given to equip, train and support properly those in the second line preparing to rotate to the front line, not least because such units have been robbed—I use the word advisedly because it is a technical expression for cannibalising, known as "store robbing"—of the equipment they need to train on so as to arrive in theatre properly prepared; and they have been robbed of that equipment because it has been used to furnish those already in the front line. The additional danger into which this puts our Armed Forces is entirely down to a shortage of cash, a shortage that could easily be remedied if the Government was so minded.
	Let me turn for a moment to the future. I worry that, with the inadequate budget that the Armed Forces have, there will be a not unnatural focus on shoring up what is required to fight today's war. The noble Baroness, Lady Park of Monmouth, to whom I am also grateful for having initiated the debate today, has already mentioned this. We are at serious risk of undermining what we may require to fight tomorrow's war, and we can be fairly sure it will not be the same war as we are engaged in today in Iraq and Afghanistan. I hope that there is recognition of the need to think beyond a hand-to-mouth policy, which is where we are today.
	Let me, for example, dwell on the sea. It remains the way by which the world conducts most of its trade; it is the only undisputed access to areas of strategic interest that can be guaranteed; and it remains crucial to the United Kingdom's economic vitality and ability to protect our interests. Early crisis management cannot depend on host nation support and over-flying rights, and maritime forces are likely to be the principal way to apply decisive influence and force in any early stages of a crisis. However, I suspect that with the overall shortage of money for defence, there is a danger of the Navy being raided to pay for today's land-centric operations. I ask the Minister to reassure the House that this fear is not justified.
	The message is clear: the Government, especially the Treasury, still have a completely peacetime mentality. For all the Government's platitudes about commitment and caring for our Armed Forces, the visible sign of this is conspicuous by its absence when we see a budget that so inadequately resources our Armed Forces' levels of activity. Certainly commitment is starkly absent when we see the appointment of Ministers who are not devoted solely to their task, as shown by the double-hatting of the Secretary of State and the previous Minister for Defence Equipment and Support.
	I make absolutely no apology for raising this subject again; it is very serious. It is seen as an insult by our sailors, soldiers and airmen on the front line—I know because I often have reason to speak to them—and it is certainly a demonstration of the disinterest and, some might say, contempt that the Prime Minister and his Government have for our Armed Forces. It shows an appalling lack of judgment at a time when our people are being killed and maimed. It is not for nothing that the Chief of the General Staff has said that his people feel undervalued. They really do deserve far better from the Government.

Lord Mayhew of Twysden: My Lords, if the Minister takes up the suggestion of my noble friend Lord King to invite the Prime Minister to read this debate in Hansard, I hope that she will consider asking him to start with the deeply disturbing, passionate and informed speech that we have just heard. There is not very much left to be said, but apparently it needs to be said time and again for all the notice that the Government take of it. In congratulating my noble and redoubtable friend Lady Park on initiating the debate, I shall add one or two reflections of my own.
	I begin, perhaps rather surprisingly, by expressing my gratitude to the Chief of the General Staff for the exceptionally thorough and authentic briefing that he gave to your Lordships' Defence Study Group two or three days ago in Portcullis House. It was attended by many other people, which evidenced the deep anxiety felt by so many for the welfare and well-being of our Armed Forces today. The Chief of the General Staff provided a presentation that was entirely soldierly. There was a very firm commitment on the part of the Armed Forces to carry out the wishes of their political masters, but there was an underlying motif that their masters must will the means.
	Much of the briefing was encouraging, particularly in the field of improved equipment for those on the ground in Iraq and Afghanistan—and not before time, we would all say. It was good to hear the commander of the heavily engaged and recently returned Mercian Regiment battle group say that he had felt fully empowered for the battle group's task. He praised in particular the Mastiff vehicle, for whose procurement we owe a great deal to the noble Lord, Lord Drayson, whose departure we continue to lament and be puzzled by.
	Nevertheless, it was not possible—and, for my part, it remains impossible—to put out of mind certain contrasts between that briefing and the tone and content of the leaked alleged CGS briefing team report which was carried on the front page of the Sunday Telegraph two days previously. General Dannatt very properly declined to comment upon a leaked document and he denounced leaking, but the document as reported seemed to carry the ring of authenticity. In particular, it spoke of the consequences for good will for the Army from its members, and their families, by reason of the great pressure their service is imposing upon them. We have all heard a great deal of anecdotal evidence to confirm this.
	The Minister will be all too familiar with the Sunday Telegraph front-page story. However, it will not be necessary for her to allude in any way to the alleged leak if in her reply she deals with three specific questions of fact which are highly relevant to the debate. First, is there now a recognised problem of soldiers going sick to get out of the Army? If so, what is the reason? Secondly, are the target times between operational tours now typically not being met and being shortened—the so-called "harmony guidelines"? Thirdly, is leave often cancelled or constrained because of operational overstretch? These questions are crucial to the fairness or otherwise of what the Army is being asked to do today.
	I should like to move from the immediate circumstances of the Army to consider the quite separate aspect of the impact upon our historic defence capabilities brought about by the cost of the Iraq and Afghanistan commitments. No one doubts that for Iraq and Afghanistan extensive costs over and above budget have been properly met, by the Army in particular. But what seems to have been hardly noticed outside—in the comments, at any rate—is the knock-on effects imposed by the Treasury, or widely perceived to have been imposed, upon our historic defence provision as a whole. Yet such are the dangers that confront our country at the moment, which have been touched upon already in the debate, that we surely cannot allow ourselves to become unbalanced in our defensive array. Ours must be a position of all round defence from which we can respond appropriately, not only to the foreground risks but to those that can be foreseen in the middle distance and even further away.
	Speaking immediately after the noble and gallant Lord, Lord Boyce, it is rash indeed for me to focus on the risk we face at sea from submarines, but I regard his remark about the "haemorrhaging" of the defence and frigate force as providing me with a springboard for doing so. I regard submarine attack as a foreground risk. Are submarines now not capable of attacking by missile from 200 kilometres away, and by torpedo from 30 kilometres or more? Will the Minister confirm that 45 countries now deploy about 650 submarines? Without in any way seeking to suggest that we should foresee a threat from the majority of those countries, is there not a dangerous number—including, for example, Iran—whose hostile potential in today's world it would be folly to discount? In which case, is it not essential that this country maintains its anti-submarine warfare capability and does not allow it to diminish through savings having to be made in its provision to make up for what Iraq and Afghanistan are costing? However, is there not a wide perception that this is now happening?
	Will the Minister confirm that the necessary individual expertise in anti-submarine warfare techniques, once lost, will take years to be reacquired? How long does it take to impart the skills needed for the location and prosecution of a target? Do those skills not need to be continuously practised? Will she assure us that anti-submarine training, both afloat and ashore, is continuing and is planned to continue on an undiminished scale? Are all those of Her Majesty's ships which had ASW capability included in their specification still being fully equipped with that capability, or are any ships now put into, or kept in, commission without it? Are there any plans to do so? Will each of the Type 45 destroyers be commissioned with ASW capability, or are there different plans? I ask the same question regarding the later Astute submarine hulls.
	When the Government speak of affordability, they are really speaking of the concept of prioritising what they are prepared to buy. Will the Minister accept that, when we are getting ever fewer ships as they become ever more powerful, we cannot responsibly afford to diminish this layer of protection that we have historically provided for them, and which we need to provide for them to guard against the risk of a submarine attack sinking them from afar? Unless our ASW capability is to be fully maintained and updated, it is inevitable that the service will come to be perceived not so much as a world-beating navy but as a coastal defence force.

Lord Bramall: My Lords, I am sure that our caring and concerned Ministers at the Ministry of Defence would subscribe to the view that our Armed Forces are behaving magnificently and gallantly, are doing their duty under difficult circumstances and deserve all support in terms of equipment and backing that this country could possibly give them. Indeed, I am sure that those Ministers are anxious to provide that support.
	I, too, greatly regret the departure of the noble Lord, Lord Drayson, who mastered how to make the complex MoD procurement system work to its best advantage and to the benefit of the Armed Forces. He forced things through and really made a difference to the equipment programme. His successor, the noble Baroness, Lady Taylor, with all her parliamentary experience behind her, still has a mammoth and urgent task ahead of her. Naturally we wish her well.
	The trouble is that you do not have to look far to find out why it is that on occasions in the past—and, I fear, why it will be on more occasions in the future—support for the Armed Forces does not measure up to what is needed and deserved. First, over the past three years or so there has been no coherently joined-up foreign and defence policy in which military force could be deployed and operate with complete confidence about the real aim of the operation or about how the broad strategy and design for battle would develop in the future.
	The Helmand area in southern Afghanistan has proved to be a truly excellent battle-training area. Every self-respecting soldier, from commanding officers down to the rank and file, is eager to go there to prove their prowess as a professional under pressure and to show how good their regiments are. I do not want to write down the value of that on the Army's overall effectiveness and efficiency in the future, but it has been that aspect, along with their loyalty and sense of duty, that has motivated our soldiers and produced undoubted high morale on the ground rather more than any clear idea of where it is all leading in the longer term.
	No military operation can be pursued with vigour, confidence and success over time without a clear-cut political aim, and it is up to the Government always to provide it. There are some signs that this is starting to happen, with the penny perhaps dropping at last that there may be ways of dealing with al-Qaeda and other forms of international terrorism—and indeed of producing more stability in the Middle East in which countries can co-exist with one another within a realistic and sustainable balance of power—other than simply a prolonged and open-ended battle of attrition against the Taliban or maintaining a permanent western military presence in Iraq, as the Americans seem to have in mind. I hope that we can look forward to a properly joined-up foreign and defence policy with more dynamic diplomacy backed, supported and strengthened, as it always must be, by military force, although not invariably led by that force—a policy that means resources and commitments can more easily be matched.
	The second restraint impeding the Ministry of Defence—and this is now urgent—is the vast funding gap that exists and is likely to continue to exist between, on the one hand, the aspirations of the Government and the real needs of the services and, on the other, the resources that are planned to be available over the next three to five years. It is no good the Minister denying that such a gap exists; the whole ministry knows it to be so after the recent results of the spending review. Every defence correspondent worthy of his name knows it as well. The Minister will have heard the most powerful assessment by the noble and gallant Lord, Lord Boyce, on the subject. There is no doubt that that gap is there.
	The Government have expensive ambitions for a successor to Trident, all apparently to come out of the defence vote. They are committed to two fleet carriers, which, however satisfying and useful they will be for the Royal Navy to possess and man, will hardly pull their weight without funding not only for the aircraft to fly off them and give them an offensive capability but also for adequate numbers of smaller craft, both to give the carriers outpost protection under a war threat and to carry out the myriad other maritime tasks that fall to the Royal Navy in peace and war such as patrolling sensitive areas, protecting our trade routes and shipping and projecting power and commitment at short notice.
	In all conflict situations worthy of the name, eventual control of the airspace is vital to the successful conduct of any battle on land or at sea. In fact that great military commander, Field Marshal Montgomery, added a 10th principle of war: "First, win the air battle". That, particularly in prolonged conflict, often comes down to numbers as much as it does to new technology.
	As for the land battle, Afghanistan is already revealing glaring weaknesses. Although the equipment is good—no one is accusing the Government of not procuring good equipment; I hope that the Minister realises that—the problem is invariably one of numbers and utility, the result of cuts in past programmes and shortages of spare parts, all sacrificed as a result of salami-slicing over the years. The chickens come home to roost when all this leads to inadequate flying hours when they are most needed. There are still not enough helicopter gunships or troop-carrying helicopters, and the Puma that tragically crashed yesterday was very old. The light tanks are the same as those that we used in the Falklands war 25 years ago. Some of the armoured personnel carriers date back as far as 50 years but are now more underpowered because of the extra protection that has to be grafted on to them. All the transport is quite simply wearing out as a result of the extremely harsh conditions and may need replacement.
	As far as manpower is concerned, the present tactic of engaging and killing Taliban—to say nothing of civilians when superior firepower, including air support, is used—and driving them out only for them to return at a later date, will lead to no satisfactory and stable outcome. Unless there can be sufficient troops to hold and protect the ground that has been cleared, it will not be possible for vital aid development constructively to take place in a way that will enable us to win essential hearts and minds in the tribal areas. The recent "Panorama" programme made that perfectly clear. So far, local forces have shown themselves unable to achieve this stability by themselves.
	If operations in southern Afghanistan are to be as successful as they could be, extra troops will be needed. To achieve that and many other objectives, as well as to correct overstretch—not only during operational tours but between them—and the enforced curtailment of training in recent years, the Army is clearly not large enough, probably to the tune of several thousand men. Such numbers are required to fill out and sustain the units of all arms, to prevent the unsatisfactory fragmentation of units and to bring them up to a proper war-fighting establishment. The Army will also need as soon as possible an all-purpose fighting vehicle, known as FRES, which will have strategic—that is, air portable—and tactical mobility, as well as proper protection against modern munitions. FRES's original delivery date of 2005 has already been postponed well into the future.
	All those things, as well as honouring the covenant in terms of badly needed housing, proper medical care and proper pay and conditions of service, cannot be provided by the money allocated in the spending review. There will not be enough to go round. Nor is it any good, as the noble Lord, Lord King, made clear, for Ministers continually to shelter behind claims of sustained growth. The figure of 1.5 per cent growth in real terms that is promised for the next three years, but which is more like 0.9 per cent in practice, starts from the lowest possible baseline after 15 years' decline and represents 2.5 per cent of GDP. It is nowhere near enough, as the noble Lord, Lord King, said, to compete with inherent defence inflation. The previous period of sustained growth, which the Government like to use as a comparison, was for nine years, from 1979 to 1988. It started with the Callaghan Government and was consistently at 3 per cent in real terms, representing 5.5 per cent of GDP. I know what I am talking about because I was on the Chiefs of Staff Committee for seven of those nine years.
	Big decisions—the Minister will no doubt say "tough and courageous decisions", although some would call them "disastrous"—will have to be made to cut back the programme and squeeze it into the money available. That can happen in one of three ways. The first is salami-slicing—and we know all the dangers of that. The second is by cutting out a complete capability; if so, the House is entitled to know what capability the Government have in mind. Would they do it on a European basis and, if so, how? The third is by responding to public and political pressure and concentrating on short-term responsibilities at the expense of those of the longer term, which would have disastrous consequences in 10 to 15 years, if we assume that Governments can be persuaded to think that far ahead, as they must in the equipment cycle. If they do not, the Armed Forces will arrive, as did the BEF in 1940, in the most appalling and parlous state to fight.
	The only way in which one of these three options, which would bring such disastrous consequences to the Armed Forces' ability to carry out their role in the short or long term, or both, can be avoided is if the Government readjust their thinking and are prepared to initiate a surge in what this country spends on its most important responsibility, the support of its foreign policy. They should spend up to 3 per cent of gross domestic product. That would make a profound difference. It would have a sensible rationale in insurance terms and what the country ought to be able to afford. It would certainly prevent the current position from getting worse; it would enable all the most important parts of the defence programme to be properly funded; and it would control the Treasury's insatiable appetite for ensuring that whatever sum is allocated to defence is not in practice made fully available to be spent at the time. It would also send a clear message, which does not exist at the moment, to those thinking of joining the services or staying on in them, that the Government are really serious about their responsibilities and will match resources to the Armed Forces' real needs and commitments, which our foreign policy believes are in the national interest. If there is no surge at all, the situation will become infinitely worse.

Lord Marlesford: My Lords, any speech from my noble friend Lady Park is based on considerable wisdom and experience, and always gives much to our debate. We owe her a deep debt for this debate.
	It suddenly occurred to me that it would have been nice if the Secretary of State for Scotland had felt that he could spend a little time sitting on the steps of the Throne to listen to this debate, but that perhaps would have been asking too much of his imagination.
	I start from the simple premise that is central to the philosophy not just of my party but of many British people who are wholly apolitical: defence of the realm is the first priority of government. The second and overall aim can be neatly encapsulated by a recent Chinese slogan: the creation of a harmonious society. The third aim must be for Britain to do as much good in the world as it can. We are still a great power in many ways, not least as a veto member of the Security Council. The world needs our values, our skills and our experience; not least, it needs our Armed Forces. The means of achieving these noble aims is sound economic management to generate stability and prosperity at home and the resources to play our part in world affairs.
	We are today engaged in two wars, yet the Government's defence policy has been and remains deplorable for one key reason: it has not matched resources to commitments. This has cost lives. A significant number of recent deaths in action and in accidents have been a result of inadequate supplies or quality of equipment. The noble and gallant Lord, Lord Boyce, made that point in the most telling way. This failure on defence is one of the main reasons why I would like to see a change of government.
	I shall start at the top and expand a little on what my noble friend Lord King said about the ministerial team. We all have our own views on what makes for an effective Defence Secretary. The qualities that do so can be very variable, as I shall illustrate with just three names. The intellect and the war experience of the noble Lord, Lord Healey, made him an extremely effective Secretary of State from 1964 to 1970. The stature, integrity, war record and previous ministerial experience at the MoD of my noble friend Lord Carrington made him an outstanding steward of our Armed Forces from 1970 to 1974. The political skills of my noble friend Lord Heseltine enabled him to repel those political groups on the left that sought to undermine our role in NATO's nuclear shield at a crucial period of the Cold War, between 1983 and 1986. When we look at the team today, what a different picture we can see.
	The Secretary of State, Mr Des Browne, has been in place only since May 2006. He had no defence experience known to me before he was appointed and he is not by any stretch of the imagination a political heavyweight. I note that my noble friend Lord Tebbit has been trying, in a Question for Written Answer tabled on 9 October but still unanswered, to discover the apportionment of Mr Browne's time between defence and Scotland. The fact that he occupies both posts reflects ill on him, as it certainly does on the Prime Minister.
	The Minister for the Armed Forces, Mr Bob Ainsworth, has been in post only since 29 June. He, too, seems to have had no previous relevant experience. The noble Baroness, Lady Taylor, the Minister of State for Defence Equipment and Support, who we are delighted will reply to our debate, has been in post for only two weeks. She was for nearly 30 years a much respected member of the other place, where she occupied high ministerial office. For a year she was PPS to Fred Mulley when he was Defence Secretary, and she chaired the Intelligence and Security Committee. I am sure that her well demonstrated talents will make her a considerable addition to the department and, of course, to the government Front Bench here.
	Mr Derek Twigg has for just one year been a junior Minister and Minister for Veterans. For 19 years he was a junior civil servant at the then Department of Education and Science, and again he appears to have no relevant previous defence experience. For all their virtues as individuals, this must be one of the least experienced and most thinly spread ministerial teams ever at a time when the demands on our Armed Forces are as great as at any time since 1945.
	We recently lost the services of the noble Lord, Lord Drayson, who had a considerable reputation in the House. He resigned suddenly and quite unexpectedly two weeks ago. The reason given was that he wanted to continue his pastime of motor racing, but I believe that the noble Lord was much too great a patriot to have abandoned ship for such a reason. It would have been more straightforward had we been told the real reason, which I gather was a dispute with the Treasury over the very large and important procurement programme for the future rapid effect system vehicles, known as FRES.
	I shall comment on one other key position at the Ministry of Defence—that of the Permanent Secretary, head of the whole MoD Civil Service. We all have our views on who were the most distinguished holders of that post. Of the two whom I would nominate from my time, the first is Sir Frank Cooper, an RAF war pilot, who between 1976 and 1982 ensured that the department got the resources that it needed to perform its tasks and who was responsible for the introduction, under Sir Derek Rayner, of new procurement systems. The other is Sir Michael Quinlan, who ran the department from 1988 to 1992. Thought by many to have been one of the cleverest men ever to work in Whitehall, he was responsible for putting together the intellectual case for upgrading our nuclear capability into the Trident system which has served us so well.
	Today the Permanent Secretary is Mr Bill Jeffrey. His previous post, from 2002 to 2005, was as director-general of the Home Office Immigration and Nationality Department, the organisation that was memorably denounced by the then Home Secretary, Mr John Reid, as "not fit for purpose". Is Mr Jeffrey really the best that today's Civil Service could produce for this crucial position?
	I have one further point on people. Your Lordships' House is well endowed with military experience, as witnessed by the six distinguished former commanders taking part today and the two former Secretaries of State who have already spoken. The House of Commons is rapidly running out of any military experience. Twenty MPs have served in the regular Army, 18 of them Conservatives, two Labour and no Lib Dems; 11 have served in the TA, all of them Conservatives; nine have served in the RAF, including five Labour, three Conservatives and one independent, with no Lib Dems; and four have served in the Royal Navy, all Conservatives, no Lib Dems. Political parties should make a real effort to persuade those with former military careers to enter the House of Commons. I agree that that might not be a very attractive proposition nowadays, since this Government have so devalued that House. Nevertheless, it is crucial if we are to continue to monitor and understand the needs of defence policy in this country.
	We have had some very successful military operations under this Government, including Bosnia, when the UN white paint was replaced with NATO green, Kosovo and Sierra Leone. But the tasks that we now face in Iraq and Afghanistan are daunting indeed. I believe that we have done all that we can in Iraq and that it is time for us to leave it. Iraq will sink or swim, whether or not we are there; its future will not depend on our presence. Afghanistan is another matter. It is crucial. We entered it ill prepared for what we would find. How could the MoD have sent the Northern Ireland Snatch Land Rovers for that campaign? Our forces have done incredibly well, but they are overextended and sadly unable to hold the territory that they have captured through gallant and effective fighting.
	Our Prime Minister must adjust our military commitments to the resources that he is prepared to make available. That probably means having a rundown in many theatres—in Northern Ireland, Germany and Cyprus, for example. A European defence dimension is not a substitute for NATO. At the moment we are wasting a good deal of money on things such as Galileo. The Prime Minister must demonstrate that he regards the overseas operations that we do undertake as having the highest priority. He must regard the men and women who serve in our Armed Forces as our most valuable national asset.

Lord Guthrie of Craigiebank: My Lords, I, too, thank the noble Baroness, Lady Park, for this important debate. First, I pay tribute to two soldiers from the SAS who were killed yesterday in Iraq. I am the colonel of the SAS, and I know that I speak on behalf of the whole House when I say that we sympathise. The two soldiers had very young children. I know, too, that Members of this House very much admire what we are doing in the SAS in Iraq and elsewhere, day after day.
	I find the Government's attitude to the Armed Forces mystifying. We should give them credit for injecting some, if not enough, new money into defence, for Iraq and Afghanistan and for training. Undoubtedly—and we should not forget this—much of the equipment that has now been introduced is as good as any equipment anywhere in the world. However, it is unfortunate that too many people were killed and lives were lost through the late arrival of this equipment, which could have been made available if adequate funding had been found sooner, when the requirement was known about.
	The fact is that the defence of our country has been underfunded for years. In the Cold War we got away with it, but took huge risks. To compound our difficulties, the Government of the day took a peace dividend that now seems unwisely large, but that was a long time ago. We now have services that have been underfunded for years and find themselves desperately stretched fighting two wars.
	At the Lord Mayor's banquet last week, the Prime Minister affirmed his commitment that he would, at all times, support and strengthen our Armed Forces, our defences and security. In my experience as Chief of the Defence Staff in Whitehall, he was the most unsympathetic Chancellor of the Exchequer as far as defence was concerned, and the only senior Cabinet Minister who avoided coming to the Ministry of Defence to be briefed by our staff on our problems. The only time that I remember him coming to the Ministry of Defence when I was there was when he came to talk about the future of the Rosyth dockyard, which was in his constituency. He must take much of the blame for the very serious situation we find the services in today.
	However, I am delighted that he is now taking more interest. He has visited Iraq and Afghanistan on various occasions and has devoted more time to those in the Ministry of Defence. But can he really understand how serious the situation is if he appoints—as others have mentioned—a Secretary of State who is not fully committed to defence at such a time as this? I, like others, speak to servicemen and women who view that as a serious slight at a time when the intensity of operations is far higher than it has been for many years. I cannot understand how the Prime Minister could do such a thing.
	It is well known that the defence budget is under huge pressure and it will be interesting to know from the Minister just which programmes will not survive—she will probably not be able to tell us today—which will be reduced and which scalings will be reviewed. We know that difficult decisions will have to be faced unless additional funding is made available. Lately, Ministers have been boasting about the extra money that has been produced for defence. I will not go over the ground that has been so well covered by the noble Lord, Lord King, and the noble and gallant Lords, Lord Bramall and Lord Boyce, but whatever has happened, it is woefully inadequate as far as running the services today is concerned. It is not a matter for self-congratulation.
	There are many examples of equipment and shortages—some have been given. I am not going to give noble Lords a long list, but one example is a brigade being deployed to Afghanistan not having been trained on medium machine guns before it goes, because the medium machine guns all have to be out in Afghanistan. That is a serious matter and risks people's lives. There is a shortage of three battalions worth of HF radios. I could go on, but I will not, because the point has already been made.
	Recently, senior officers, including the Chief of the Defence Staff, Sir Jock Stirrup, have thought it necessary to speak out. It is regrettable when senior officers think it necessary to do that. I do not think that it is the British way or that it is constitutional, but it indicates how they are at the end of their tether. What the Government are expecting them to do and deliver is absolutely unreasonable with the resources that they have.
	We find ourselves in a very dangerous world at the moment. Long gone are the days when we could remain safe in our own country, isolated from troubles elsewhere. If the Government are really serious about defence and security, as the Prime Minister clearly said last week—it is interesting that government support behind the Minister has just gone up by 50 per cent, which does not indicate that members of the Government in this House are taking it very seriously—funding must be increased or the Government will seriously damage one of the state's greatest assets beyond quick repair.

Lord Selkirk of Douglas: My Lords, the noble and gallant Lord, Lord Guthrie of Craigiebank, has spoken with great authority and I hope that his words will be seriously considered by 10 Downing Street in due course.
	I should mention in passing my own interest as Honorary Air Commodore and as President of the Scottish Veterans Garden City Association, which provides houses for veteran service men and women who have an element of disability. I also have a past interest as an Army reservist for just on 10 years in the Cameronians (Scottish Rifles) who were at that time the Scottish equivalent of the Royal Green Jackets.
	Today, I wish to raise the issue of the Government's commitment to the military covenant. We understand that the military covenant is an unwritten commitment between the state and service personnel. But a very good definition of it was given in the Army Doctrine publication volume 5, already quoted by the noble and gallant Lord, Lord Craig. The key sentences which he mentioned bear repeating:
	"Soldiers will be called upon to make personal sacrifices—including the ultimate sacrifice—in the service of the Nation ... In return, British soldiers must always be able to expect fair treatment, to be valued and respected as individuals, and that they (and their families) will be sustained and rewarded by commensurate terms and conditions of service".
	The noble and gallant Lord went on to refer to the,
	"unbreakable common bond of identity, loyalty and responsibility which has sustained the Army ... throughout its history".
	Very serious concerns have been raised today about honouring the military covenant. One was referred to by the noble Baroness, Lady Dean; the time that it takes for inquests to be held. Bereaved families have to wait for very long periods, sometimes years. Will the Minister please say in her winding-up speech what is being done to hasten the process to alleviate the distress of those who have lost their next of kin?
	Then there is the allegation—indeed, it is more than an allegation because a considerable amount of evidence has been put forward—that the accommodation is completely inadequate for those returning from active service. I note that the Defence Committee in September 2007 said that some accommodation remains appalling and that accommodation is an important factor in retention. The committee's actual words were that,
	"the MoD must do more to address the condition of accommodation if it is not to lose experienced personnel who are very difficult to replace".
	Will the Minister assure the House that upgrading of accommodation will be a top priority and that financial windfalls obtained as a result of the sale of Ministry of Defence land, as in the case of the area surrounding Chelsea Barracks, will be ploughed back into the Ministry of Defence estate?
	There is also a query about equipment—again, they are more than queries because there is a great deal of evidence. The noble and gallant Lord who has just spoken mentioned that in some cases equipment arrived late. The Minister will be aware that in March 2003, the assistant deputy coroner for Oxfordshire made a very direct criticism concerning the delay in issuing personal body armour. He said:
	"To send soldiers into a combat zone without the appropriate basic equipment is, in my view, unforgivable and inexcusable and represents a breach of trust that the soldiers have in those in Government . . . Sgt Roberts's death was as a result of delay and serious failures in the acquisition and support chain that resulted in a significant shortage within his fighting unit of enhanced combat body armour, none being available for him to wear".
	Sadly, this is not the only case where criticisms by the coroner and, indeed, direct condemnations, have been made. We are aware of the more recent case of her son's death taken up by Mrs Gentle. I hope that Ministers can reassure us—and that the Minister will reassure us today—that lessons have been, and will be, learnt, and that great care will be taken in future to make certain that necessary and potentially life-saving equipment is readily available. Surely the Government's commitment on such matters should be put beyond doubt. I hope that the Minister will do just that today.
	The Minister will be aware of the very direct request by the Defence Committee in July 2007, which stated,
	"we recommend that the MoD make even greater efforts to increase the provision of appropriate helicopters to UK Forces and sufficient trained air and ground crew".
	Surely having sufficient Tornado aircraft and helicopters available is vital for the troops on the ground.
	The Minister will also be aware of the Honour the Covenant campaign of the Royal British Legion which seeks a just compensation scheme, a greater commitment to support the physical and mental health of service men and women and more support for bereaved families. I warmly welcome the words of the Armed Forces Minister, Bob Ainsworth, when he said that,
	"making sure that the Covenant is upheld, particularly when we are asking our people to do so much, is very important. For this reason we keep the support we provide to our personnel and their families under constant review".
	I am very glad that constant review has been promised. I understand that the fighting in Afghanistan has been far more intense than anything experienced since either the Korean War or the Second World War, and that perhaps not all the facts were fully within the nation's possession for some time after the fighting took place.
	The Government should give wise and far-sighted signals with regard to their future intentions. As regards the plans to withdraw the ship "Endurance" before the Argentine invasion of the Falklands, questions were then asked whether the wrong signal had been given, and many commentators took the view that that proposal had not been helpful.
	If the British Government are serious about their long-term commitment to Afghanistan, Ministers must leave all parties in absolutely no doubt. The suggestion floated in the press that Tornado squadrons might be withdrawn would be a very dangerous signal. I urge the Minister to give good signals by retaining the Tornado front-line squadrons—I hope that she will reassure us about that today—and by making it quite clear that in future the job of the Secretary of State for Defence will be full time. It must be entirely wrong that at a time of conflict and serious casualties, defence responsibility should be combined with another post.
	I should like to ask the Minister a question about Nimrods that has not been raised today. Can she reassure us about the manning levels required, the serviceability and safety of Nimrod flying requirements at present and about the future of Nimrods?
	In 2003, Geoff Hoon said that the Government have effectively been conducting continuous concurrent operations, deploying further fighters, to more places, more frequently and with a greater variety of missions than set out in the Strategic Defence Review planning estimates. He was correct. The review of 1998 stated that,
	"we must match the commitments we undertake to our planned resources, recognising that there will always be the risk of additional short-term pressures if we have to respond rapidly to an unforeseen crisis".
	In other words, that review recognised the importance of matching resources to necessary and required operational activities.
	It is a matter of very grave concern that the Chief of the Defence Staff has said that the Armed Forces are very stretched. I remind the Minister that if a piece of elastic is stretched too far, it loses its elasticity and eventually will snap. Frankly, none of us wants that to happen to the armed services under any circumstances. I urge Ministers, and the Minister here today, to recognise the inescapable duty to honour the spirit of the military covenant and to ensure that Her Majesty's armed services will receive the necessary back-up support as they put their lives on the line on behalf of our nation on a daily basis.

Lord Inge: My Lords, like other noble Lords I thank the noble Baroness and congratulate her on securing this very important debate. She is very knowledgeable about the serious and dangerous challenges that face our Armed Forces, and I know that they have huge affection and respect for her. I only wish that Her Majesty's Government shared that understanding and were prepared to take positive action to fund properly some of the problems that have been so clearly highlighted in our speeches.
	Like other noble Lords I pay tribute to the noble Lord, Lord Drayson. He not only mastered his brief here but began to understand what makes the Armed Forces tick. I am afraid that his sudden disappearance sent a terrible message to the Armed Forces.
	It is common knowledge that as a result of the Comprehensive Spending Review some very tough decisions will have to be made, which is mandarin-speak for further major cuts. Like the noble and learned Lord, Lord Mayhew, I attended the Chief of the General Staff's excellent briefing the other day. I talked about the problems of funding with a soldier there; he raised the subject, not me. He said, "Sometimes, I think that I would have been better off working for Northern Rock".
	Despite the conflicts in Iraq and Afghanistan dominating the media, you are left with the very clear impression that defence is not a major issue for the Government and that they do not really seem to understand the challenges which our Armed Forces are facing and the long-term damage, if they are not careful, that could be done to our Armed Forces. They seem more interested in managing the media than facing the problems which the Armed Forces are facing.
	The Government pay great tribute to the bravery and professionalism of our Armed Forces but they seem to hide behind that praise and the Prime Minister and the Government are not prepared to recognise what those challenges mean in terms of funding, not least for the future equipment programme, in order that the three fighting services—and they are fighting services—are properly equipped to meet the challenges that lie ahead. Nor are they prepared to provide the funding to meet what we now call the covenant. That was starkly illustrated by the Royal British Legion's campaign about the nation's responsibility to honour the covenant under the banner headline, "We count on him. Can they count on us"? It is extraordinary that the Royal British Legion felt that it was necessary to mount that campaign.
	As other noble Lords have said, the defence planning assumptions made in 1997 bear little reality to the intensity of operations and war fighting that our Armed Forces are now engaged in. Indeed, our track record of predicting what would happen in the future was never particularly good. That means that you have to be prepared for the unexpected. We were not really prepared for Northern Ireland or the Falkland Islands; we underestimated the challenge of the Balkans; we did not predict the first Iraq war and are having to learn the hard way in Iraq and Afghanistan. The lesson that I draw from this is that you have to be prepared for the unexpected not only as regards equipment, but much more importantly, making sure that you have adequate manpower to cope with high-intensity conflicts and low-intensity operations. You have to be able to sustain those operations over much longer periods than we ever planned for. Such capabilities do not come cheap. It is a sad fact that the defence budget has been underfunded over many years. In 1982-83, it was 5.1 per cent of GDP. In 1991-92, it was 4.1 per cent of GDP. At the present level, it is 2.5 per cent, and it has stayed around that level.
	In a short debate such as this it is not possible to make specific recommendations, but in a brief look at some of the capabilities of the three Armed Forces, I will highlight one recommendation for each service.
	The cost for the Royal Navy of having two carriers has meant significant cuts in the surface fleet, as the noble and gallant Lord, Lord Boyce, said. In this uncertain world, does it really make sense to have a Royal Navy that cannot meet a wide range of unexpected operational commitments? Certainly we could not do the Falkland Islands now as we did then. I also strongly support the independent deterrent, but the fact that that must come out of the defence budget must raise huge questions. While talking about the Royal Navy, I pay huge tribute to the Royal Marines, who have conducted themselves so gallantly and effectively in Iraq and Afghanistan. They are a first-rate fighting force.
	It is also clear that the Army is too small by a number of thousands of men. When I talk about the Army, I am talking about not only the Regular Army but the Territorial Army. It is difficult to recommend where that additional manpower is most needed. I caution the Conservative Party about saying that there is an immediate need to resurrect the three battalions that were removed as a result of the reorganisation and restructuring of the infantry. We need to see some of the established ones made much more robust. I would be interested to know what percentage of GDP they plan to allocate to defence.

Lord King of Bridgwater: My Lords, the noble and gallant Lord raises an interesting point. Is it true that only one battalion is at present at full strength and that 14 battalions are more than 100 under strength?

Lord Inge: My Lords, I cannot answer the noble Lord specifically. It is a fact that a number of battalions are under strength and that without the Territorial Army they would be in very serious trouble.
	The RAF strategic transport fleet needs replacement, and there is a shortage of helicopters. It is hard to envisage any operations in the future when there will not be significant demands on the helicopter fleets of the Royal Navy, the Royal Air Force and the Army.
	Most importantly, the three fighting services are about people. They are a priceless asset. If they do not feel valued, if they do not feel that their families are getting a fair deal or that they are being properly looked after, if they do not feel that they are being adequately trained and equipped and if they feel that Her Majesty's Government do not really care, morale will suffer. The noble Baroness, Lady Park, mentioned that. It is particularly so when the forces are heavily committed on operations. I am not saying that morale is bad. I have been to Afghanistan, and when you go round you see that morale is high, but morale can go very quickly, and they need to feel that the Government are really behind them. If morale does go, it takes a lot of money and time to restore it.
	In conclusion, I will say something about the important relationship between the Armed Forces, the Secretary of State and the Prime Minister. That relationship is more important than they might realise. As many noble Lords have mentioned, the fact that at this time the Secretary of State has a second job is extraordinary. He is known to some in the military as "Two jobs Des". It is a very bad message to send to the Armed Forces. The relationship is hugely important and should not be underestimated. Where there is trust, that relationship works really well. It is interesting to talk about trust, given the Prime Minister's writing about heroes. These are the very people that we are talking about. Trust is a powerful asset. When it runs deep, it strengthens any relationship. When there is no trust or, even worse, when trust is broken, co-operation becomes much more difficult to sustain. The Prime Minister needs to think very hard about that.

Lord Luke: My Lords, like other noble Lords, I first thank my noble friend Lady Park for introducing this important debate. Anyone who has been listening to the first part of the debate and the very interesting, pertinent and robust speeches made by many noble Lords who really know about this subject will be most grateful to my noble friend.
	It will come as no surprise that I intend to speak briefly on the subject of the Royal Navy. I shall ask a number of questions that I hope will be answered. As the noble and gallant Lord, Lord Boyce, said, the British people are as dependent as ever they were on maritime trade, but because most of them have no personal links to seafaring, they have become much less aware of that. It is a pity that there seem to be very few efforts to acquaint the public with the Navy and its mission. However, we are now becoming more and more aware of the enormous explosion of economic activity in the Far East. That will put increasing pressure on energy resources, food supplies and maritime traffic to supply and safeguard both. Then there are our commitments to NATO. Are the Government truly happy that the United Kingdom's maritime security can be assured?
	The Indian and the Chinese navies are growing quickly. In India, I understand that a new aircraft carrier is being built, together with 30 other warships. China is rebuilding and adding to its significant fleet of submarines. It is therefore essential for Britain to continue to maintain its power projection resources to underpin sovereign and coalition actions and to bear our proper share of the communal burden. To do so, we must at all costs resist further reductions in the size of the fleet. It has been said that one modern unit is the equivalent of several of an older design and that therefore it is safe to cut numbers because improvements in capability more than offset the cuts in numbers. The fallacy is to believe that the most capable ship in the world can be in more than one place at a time.
	Therefore, further cuts in the active and future fleet should simply not be entertained. The age of the fleet is also a vital factor, as the building rate since 1997 has been unprecedented since well before World War I. By the end of 2007, no operational frigates or destroyers will have been fewer than five years in commission, and 14 ships will have been commissioned for more than 15 years. We will be told that 28 ships have joined the fleet since 1997. However, since that date only eight ships have been ordered and only four of those are destroyers or frigates. To sustain a force of 25 destroyers/frigates, as was announced in 2004, requires a minimum build rate of at least one new ship per year. Current plans seem to show only five more destroyers or frigates entering service before 2017; that is assuming that the eight Type 45 destroyers are all eventually built. During the same period since 1997, 13 destroyers or frigates were disposed of.
	"Ah", the Minister may say, "We will have the first carrier in service in 2014". The Minister's predecessor, the noble Lord, Lord Drayson, deserves our thanks for pushing through and finally confirming the orders for the "Queen Elizabeth" and the "Prince of Wales". Today, I read that contractors have now signed an agreement to co-operate with the Akers yard where the new French carrier will be built. Apparently, it is also associated with this agreement. I should be interested to know how much the French will be involved in the building of our carriers. We know that they have bought the design.
	Returning for a moment to the noble Lord, Lord Drayson, who has been mentioned a great deal in this debate, I wish to say from the opposition Benches that I know very well how he established a great rapport with the industry and his reorganisation of procurement arrangements will be his lasting legacy.
	However, many questions remain and here are some. For example, is the expected total order for the T45 destroyer to remain at the six ships currently contracted? Including the cost of design, each ship costs some £1 billion. Considering the huge resources devoted to the development and design, is this production run of six large enough to amortise the design costs efficiently? What are the Minister's plans for further utilising the investment already made in this design? What effort is being made to sell it to allied navies? What scope exists to make use of the design for future frigate projects? This seems to strike at the heart of the issues concerning the running costs of the Royal Navy.
	One of the most important issues in the development of new naval forces is timing. Can the Minister confirm the timescale for concluding the negotiations for the purchase of the JSF for the Royal Navy and the RAF? Will the conjunction of the in-service date of the first carrier and the availability of the first squadron of JSFs be maintained? Can the Minister comment on the latest report that first delivery of the JSF will not be before 2017? If that is correct, it is most unsatisfactory. The design of the new carriers and in particular the type of launch system has of course a direct bearing on the JSF order. Can the Minister confirm that the STOVL variant is still the preferred choice of fighter for the carriers? Is there any truth in the rumour that one will constructed with a steam catapult? What other aircraft launch systems are being considered? As noble Lords can see, there are many unanswered questions regarding the progress of the Royal Navy. Perhaps I might ask something more general, but just as pressing. Can Minister tell the House with what degree of confidence we might expect a proper contract to be signed for the new carriers during the next six months?
	It is important in these sorts of deliberations to try to appreciate the broader effects of naval projects and acquisitions. Can the Minister outline the expected benefits to employment in the UK aircraft industry of the JSF programme? Considering that the JSF is the only new aircraft in the UK's forward defence programme, what chance is there for UK industry to gain so-called "noble work"' on cockpits, wings, and technical systems?
	A carrier group comprising one or both of the great carriers escorted by T45 destroyers and submarines will be a very potent force in keeping the peace in conjunction with our American allies. It will also project our power and influence in the world for many years to come. We are at last making progress in this great design, which we have consistently supported for a long time on this side of the House. It is a welcome return to a maritime-focused strategy that is more in keeping with the traditional British way of war.

Lord Ramsbotham: My Lords, I join all noble Lords who have thanked the noble Baroness, Lady Park, for, and congratulated her on, obtaining this important and timely debate. I say it is timely, because if there is any time of the year when the nation focuses on its Armed Forces it is, sadly, this time of year marked by festivals and ceremonies of remembrance. It is interesting this year, more than in any other year I can remember, that in addition to remembering the sacrifice of people in the past, attention has been drawn to the sacrifice of the young men and women currently fighting in two wars whose fierceness is far greater than any war that I and my noble and gallant colleagues—other than the noble and gallant Lord, Lord Bramall—have had to face.
	The noble Baroness, in introducing her speech, used two phrases about which I have been thinking ever since. She said that she spoke with a heavy heart, but with indignation. I was reflecting on that because, as noble Lords have spoken, there has been a heavy heart certainly among my noble and gallant friends; in our careers in the Armed forces we faced neither the challenges that are currently being faced, nor the same challenges of deprivation of what we needed to do the job. My indignation is that this has been unnoticed and should not have been, given the frequent speeches, articles and attention drawn by serving, retired and other people to something that should be glaringly obvious and appears to have been ignored.
	The noble Baroness, Lady Park, mentioned two other words that noble Lords have picked up on—morale and pride. I shall leave pride to the end, but, following what my noble and gallant friend Lord Inge said, morale in the front line is special and unique. I cannot remember anything quite like the feeling at the time I was serving in an operational unit. It is indescribable and intangible, but, my word, it is powerful. We are concerned not just with morale in the front line of people who have a job to do, but about the morale in the whole structure of the Armed Forces. My warning to the Government is that while I would not say that morale is in imminent danger of breaking, it is fragile. I have used that word many times. It is fragile, and morale must not be taken for granted. Woe betide you if you do.
	Two weeks ago I attended the annual briefing of senior Army officers at which, by tradition, someone comes from an operational sector and briefs us on what it was like. This year we had the commanding officer of the Mercian group, mentioned by the noble and learned Lord, Lord Mayhew. The officer was full of praise for the equipment with which his group had been provided—the Bulldog, the Mastiff, the multi-barrelled grenade launcher, the heavy machine gun and so on. But, he said, it was unfortunate that the equipment was available only in Afghanistan and they could not train on it. That is extremely short-sighted. I remember being sent to Borneo in 1965; the day before we left Malaya we were equipped with the Armalite rifle bought from the Americans. I refused to equip my whole company with it. I said that we would go half with what we had trained on and half with the new one and that we would change over in Borneo. You must have people properly trained and confident in their equipment before they go on operations, because when they arrive they have to hit the ground running on day one.
	At that briefing two stark statistics were given to us. The first was that the Royal Anglian battle group had 135 battle casualties evacuated during its time in Afghanistan—a huge number. I was interested in the exchange between my noble and gallant friend Lord Inge and the noble Lord, Lord King, on numbers or size. One of the lessons of the first Gulf War was that our individual organisations are too small. That is what needs to be put right. If they are to sustain that level of casualties and remain operational, they will have to be bigger—or they will have to borrow from other organisations which will then not be ready to do their task when the time comes. The second statistic was that every non-commissioned officer in that battalion was involved in 60 shooting incidents during the six-month tour. That is a tremendous intensity of operations.
	Two nights ago at a friend's 80th birthday party I had the great pleasure of meeting his grandson who had returned the night before from a six-month tour of duty in Iraq with the Irish Guards. I cannot say how much pleasure it gave me to talk to that fit, confident, proud young man about what he and his men had achieved. But everything that I have heard in this debate makes me concerned that we are in danger of undermining those sorts of people and the contribution that they make to the nation.
	The CSR has already been mentioned. At the briefing I mentioned, the reckoning was that the CSR amounted to a reduction or at best to a zero per cent increase because of all the resulting commitments. However, those present were very angry that the Treasury was clawing back the £2 billion spent on the urgent operational requirements which have been placed on the battle group in Afghanistan and for which it has been so highly praised—and it is outrageous. If you send people to war without the kit they need and you then give it to them, then well done. But if you demand that they pay for it out of what they have already been given, then you are undermining everything that is good about the operation.
	Of course the only alternative in this case is to take the £2 billion from other areas. Other noble Lords have addressed that point. Will it come from long-term requirements? I agree entirely with the noble and gallant Lord, Lord Boyce, when he questions whether the strategic nuclear deterrent should come out of the defence budget. It is a political weapon. It should be paid for separately and the Navy should not have to suffer. Noble Lords have mentioned the aircraft carriers and the Joint Strike Fighter that will accompany them, the Astute submarine and the Eurofighter. Those are the big spenders in the budget—are they to go? Are requirements such as the family of vehicles for the Army and the other equipment to go? Or is the covenant to be further endangered by the failure to meet all the requirements mentioned so frequently in this debate?
	The programme as published is simply not affordable. There are two criteria in the definition of affordable: can you afford it, or can you afford to give up what you have to give up in order to afford it? The Government have never tackled the second question. All we have had is endless promises—you will have this, you will have that and you will have the other—but we know that it cannot happen because the funding is not there. Now we have the stark message that, on top of everything else, £2 billion is being clawed back to pay for what our soldiers need to protect them on operations to which they have been committed by this Government.
	Many noble and gallant Lords have given their views on this as professionals and many other noble Lords have orchestrated their views as well. My view is that it is high time that the Government stopped basking in the glory of the performance of their willing and able Armed Forces—who will always do whatever they are told to the best of their ability whenever they are sent to do it. The Armed Forces do it through pride: they are proud of who and what they are and they are proud of their nation. I just hope that the Government will demonstrate sufficient pride in them to enable them to do what they do so well. If they do so, they will be entitled to take some pride in the performance. Otherwise they should shrink from taking any credit for what people are achieving in circumstances that could and should be prevented.

Lord Lyell: My Lords, I thank my noble friend Lady Park for giving us the opportunity today to have a good, lengthy debate on defence. One looks down the speakers list to find half a dozen dazzling speeches. Perhaps I may make one request to the Minister: please, will she take up the suggestion of my noble friend Lord King and see that the report of this debate is brought to the Prime Minister's notice? As well as being a very competent Scot, accountant and figures man, his heart is in the right place and I think that he would take to heart what is being said today.
	It is a great privilege and pleasure, and great luck, to follow the marvellous speech of the noble Lord, Lord Ramsbotham. He justifies the British Army's motto, "Be The Best". That was certainly one of the best speeches today and I would reiterate much if not all of what he said. However, as a very humble 19-months' serviceman, I was always taught that you should concentrate on what was in front of you, and I see that the subject of this debate is the long- and short-term future of the armed services.
	We have heard a bit about the long term: the carriers. It seems to be good, innovative thinking and good planning. I have the good luck to be the secretary of the House of Lords Defence Group under the marvellous chairmanship of the noble Baroness, Lady Dean. We made two visits in July, one of which was to the Royal Naval Air Station at Culdrose where, under the excellent leadership of Captain Thicknesse RN, we saw the Merlin and the Sea King helicopters and what they can do; I think they will be part of future carrier operations. I hope that the Minister can reassure me on strike training—I hope that that is the right term for air power—in the GR7s, the naval version of the harrier which will bridge the gap on the carriers before the arrival of the vertical and short take-off version, let alone the carrier version of the Joint Strike Fighter. I understand that the Navy will be acquiring the VSTOL.
	As for air power in the long term and the Typhoon—which the Defence Group had the good luck to see during a visit earlier this year to the first operational squadron at RAF Coningsby under Group Captain Atha—I hope the Minister can confirm, probably later in writing, that the good work will continue, and that repairs to the runway at RAF Leuchars will soon be completed. I understand that 6 Squadron, the first operational Typhoon squadron detached from RAF Coningsby, will soon be at RAF Leuchars. I am very glad that my nearest RAF station will be equipped with this excellent and most modern aircraft.
	As for the short term, I can add nothing to what has already been said about Iraq. As for 2008-09 and political developments in the United States, I just wonder what will happen. I suspect that our operations in Iraq will be affected by what happens across the Atlantic, and that they will continue.
	I turn to Afghanistan, the main theme of today's superb speeches. I have never been there—I do not know it—but I have looked on a map and perhaps I have read too many novels about the military operations and the life there. The terrain, the extraordinary mix of people and what they want in supporting the Government are very difficult. I am concerned that it will be a very long-term operation, but perhaps the Minister can confirm that. Everything that has been said today indicates just that.
	I return to the home front. In the debate, an enormous amount of time has been spent on, and the main thrust has been, our people in the Armed Forces. The Army's motto is "Be The Best" and its members certainly are, each and every one of them—not just those who serve but also their wives and families and those who support them. They certainly make our Armed Forces the pride of this country and of many admirers around the world.
	The young men in the Armed Forces are not Masai warriors, or those professionals who go to war and then retire to domestic life at the age of 25 or 30. Our young men are incredibly professional, and are certainly as good as any you will find in the world, if not better, but they are not ascetic monks. They have domestic and home lives; they have people at home they want to see. That is why I am so pleased my noble friend Lord Selkirk referred to housing and to Chelsea Barracks, which I passed this morning on my way to your Lordships' House. I understand that £500 million or thereabouts might be achieved from the sale of Chelsea Barracks for all sorts of purposes. Like my noble friend, I hope that those funds can be reinvested to improve the existing stock and to refurbish other stock in one or two years. That money could straightaway be put towards refurbishing much of the rundown, tired and fatigued housing all over the United Kingdom, and possibly abroad, where it is needed.
	On the people concerned, the noble Baroness, Lady Dean, referred to young people. I am pleased to see that the noble Lord, Lord Faulkner, is on the Woolsack today. He and I share a great love of sport, including football. The noble Lord, Lord Faulkner, will appreciate the four-letter word "duty" as he sits there, and I am sure that he will enjoy himself. At the opening of the Wembley Stadium, I was delighted to see Private Beharry, Victoria Cross, come out. Little by little, such events bring the situation home to the public. I would call him, and others like him, a hero and I believe it brought the matter to the public's notice in a subtle way.
	We have heard, and we shall continue to hear, enormous amounts about overstretch. I have a note here about the arms plot which may come under the aegis of my noble friend Lord King. Service men and women, including their families, require intervals for rest and recuperation, let alone for training. They might need retraining, or training on new skills for new tasks which they will be asked to undertake, but that is all done during the intervals needed by our service men and women.
	There is another darker or shady side to the situation: injuries and casualties. My noble friend Lady Park, other members of your Lordships' Defence Group and I have been fortunate enough to visit military hospitals at Northallerton and Haslar, and my noble friend Lady Park may remember visiting the military hospital at Frimley, which caused considerable concern. My noble friend was robust and extremely tough in demanding that Frimley would get everything that it needed. That is certainly relevant today.
	In March this year, I was extremely fortunate, with my noble and learned friend Lord Mayhew and the noble and gallant Lord, Lord Craig, to visit Selly Oak Hospital in Birmingham. We found that the two military wards were superb. Something that appealed, besides the service, the dedication and commitment, were two separate facilities on site for accommodating single servicemen under diagnosis there, together with refurbished flats for relatives visiting the wounded and ill soldiers. The dedication and skill put into refurbishing that accommodation is second to none. That is one small detail, but little by little, progress is being made in that area.
	Your Lordships have referred to kit. The noble Lord, Lord Ramsbotham, spoke about the lamentable situation in which soldiers have to spend their own money to get the best kit that they need. I am confident that the Minister will take up this point, following the traditions of the noble Lord, Lord Drayson, whose loss we regret. We wish him all the best in the future. I give my personal thanks, support and devotion to the men and women who serve in the Armed Forces 24 hours a day, seven days a week, today and every day for as long as it takes. I am very grateful to my noble friend Lady Park.

Viscount Slim: My Lords, I thank the noble Baroness for this very timely debate. With courage and dedication, she has done much in her life for our country. I welcome the Minister. She may not entirely like what she hears, but we are here to help her and we will do so as much as we can. We will try to get her on net, as I think that that is rather important.
	I thank all noble Lords for their kind words about the SAS casualties. The noble and gallant Lord, Lord Guthrie, is our Colonel Commandant and I am the president of the SAS. We have obviously had a bad time. One hopes that the badly injured will survive. Lately, the noble and gallant Lord, Lord Guthrie, and I seem to be going to Hereford more than we would wish on such occasions.
	I was not amazed but I was sad that in the Queen's Speech I could not pick out the word "military" anywhere. I would like to have seen a thank you or some gratitude from her Majesty's Government for what the Armed Forces have done. It may not be a normal thing to do, but there are people wandering around saying that they have a bit of vision today. I think that it would have been very good news for the Government and very good PR. Everyone in the nation hears the Queen's Speech and it would have awakened the population a little to what is happening overseas and the terrorist problems that we have in our country.
	I believe that the covenant has been broken, not just yesterday, but over the past 10 or 15 years. There is no one else to blame for that except the politicians—the parliamentary system and all three political parties. As the noble and gallant Lord, Lord Guthrie, said, there is hardly anyone in your Lordships' House today for what is a mammoth and important debate. I think that all parliamentarians are culpable, because the military is often at war but the nation is not and Parliament is not. The Cabinet does not think like that. We have peace and everyone is looking to ensure that people get a new set of free false teeth, rather than to see that a serviceman is properly looked after and things like that.
	Briefly, the talk is that there has been no war or battle like Afghanistan since Korea and that they are similar. I do not subscribe to that entirely, although the close-quarter fighting can be the width of your Lordships' House. Certainly, in Korea, it was that and less. But in Korea there suddenly seemed to be an awful of Chinamen about. They came from everywhere; it was an avalanche. I merely give your Lordships that as an example because, looking at the history and present position of Afghanistan, your Lordships will see that there are areas that the Taliban have and rule. History shows that, when that happens, various tribal chiefs and warlords get coerced into the Taliban net. Gradually, enemy numbers increase. I hope that it will not happen but have a feeling that it might; there will suddenly be an awful lot of enemies. Warlords suddenly give up their individual hatreds and cobble themselves together and you suddenly have outside your gates not just hundreds, but thousands.
	When I visited Afghanistan with the noble Earl, Lord Attlee, a seasoned and experienced solider, everywhere I went I asked whether our servicemen had sufficient ammunition. I once just about ran out of ammunition and it is not happy feeling. I understand that we do not make our own ammunition but buy most of it from abroad, and sometimes some of it does not work very well. We ought to ensure that we are stocked and supplied correctly and that there is no sudden panic that we cannot get it or do not have it.
	In the same way, perhaps the Minister has not yet been fully briefed, but there is a long supply route from Karachi to Kandahar by vehicle. It is open to all sorts of interference, of which, luckily, it has not had too much lately. But we owe a debt of gratitude to President Musharraf for allowing that to be and for the support that he gives. People are currently rather throwing bricks at the president, and our Foreign Office and our American cousins seem to think that there should be more democracy. We should be very careful; after all, it took us 400 years to sort of get democracy going. The people of Pakistan, with their Muslim way of life, do not necessarily want our type of democracy; they will develop their own. Your Lordships may be interested to hear that my taxi driver in Islamabad said to me, "We have a saying in Pakistan: never pay your lawyer, never pay your barrister—buy the judge". The president might therefore be quite right to make some changes in the chief justice's department. It may be that bringing back failed, and perhaps not always very honest, politicians is not the best for Pakistan today.
	Coming down to earth, I was in America with my old friends the American Special Forces, whom I have known since the day President Kennedy started them. I was asking about the best sniper rifle. You are not going to win the war in Afghanistan, urban or countrywide, with sniper rifles, but they are an important weapon for the Army and the Royal Air Force Regiment. I was told the other day that we have a new one; I do not know when it is coming in. I asked about this in America and was immediately taken and shown four different sniper rifles, of which I would have taken three. I asked whether they were readily available off the shelf. "Yes", they said. I said, "Well, I would only want to sell them or give them to the British Army or the RAF Regiment". They said, "We can supply tomorrow". I merely point to this: why do we not buy equipment off the shelf?
	The noble Lord, Lord Gilbert, and I gave the Minister's predecessor a tough time about C17 aircraft. We asked: "Why don't we buy more?" and "Why don't we buy helicopters off the shelf?". People reply: "Well, who would maintain them?". If you can put 10,000 civilian security personnel into these places, you can put civilian maintenance crews in. You have to hire them. We went through a great deal of trouble in your Lordships' House getting civilian practices properly into the forces' new military law. In business, if we want something we go and get it, whether simple or technical. This was where the noble Lord, Lord Drayson, was so good: he knew how to do these things and had business management experience.
	I was going to do this slightly differently from the noble Lord, Lord King of Bridgwater. I was going to ask why members of the Cabinet cannot sit around the table and say that the military and defence forces matter, that they must do something about it for the present day and the future and that they must really take an interest and be seen to want to be part of the defence of Great Britain. They have singularly failed to do that so far.

Lord Selsdon: My Lords, I always like following the noble Viscount, Lord Slim, because he gives me a feeling of supreme British confidence. I will try today to speak in a slightly different way from your Lordships because I regard this as something of a blood-letting debate. My noble friend Lord Lyell and I have been in this House for nearly 90 years between us, and it is the first time I have ever seen such a savage attack upon a Government.
	That shows the remarkable mind of the noble Baroness who introduced this debate. I first met her when I had a lot to do with the Middle East at a lunch at No. 10 Downing Street. In a gentle way, she came up and said, "I'm Daphne Park. Can you tell me something about yourself?". She never told me anything about herself. It was only years later that I realised that she had a heart of gold and a mind of steel. She has chosen such an appropriate moment to raise this debate. I am not saying that I have something against women in the military or anything like that, because who can when you have the Boadicea of them all—the noble Baroness, Lady Dean, who leads our defence group—sitting opposite you? The Minister is not in her seat at the moment, but we need someone on the Benches opposite who has political skill and cunning. The noble Baroness, Lady Taylor of Le Mans—no, of Bolton—has that skill.
	To go back to the speech of my noble friend Lord Marlesford, we remind the noble Baroness that, behind her, we can put 80 members of the Conservative Party who have served in the Armed Forces, six Chiefs of the General Staff, 60 from the Cross-Benches, 17 from the Liberal Democrats—with the sad loss of the noble Lord, Lord Garden—and a really great force. This is what we have to offer the nation.
	I am afraid I would like to do a little blood-letting too. By accident, but not necessarily by design, I have fairly considerable experience of the Middle East and of the countries where we have conflict. When it was decided to go to war, I spoke about it, but I never said that I would support the war. All I said was that I would support for ever and a day the right of the Prime Minister of the country to make that decision. It was one of the most disastrous decisions ever for the Armed Forces and for this country, but we can put it behind us by saying it was the Blair Government, now gone. That is what I have now done mentally because this country always has to have a Government and on defence matters we should always seek to support it.
	However, I have a few problems. My noble friend Lord Lyell—whom I regard as my chief secretary who tells me exactly what to do—and I are known as the "war Lords". It is better occasionally to attack and then defend. The current Secretary of State, who has a split job, one day turned up to see the war Lords and say hello. He spoke for a few moments. He said, "I don't know anything about defence, but I'm going to learn and I'm going to go to see what they are doing in Afghanistan". He then left the room for a Division. Then he came back and said, "Shall I go on?". We were all pretty put off, so we said no and he left.
	Last night, the war Lords—myself, my noble friends Lord Lyell and Lord Luke, and the noble Lord, Lord Gilbert—went to the defence attachés meeting in Lancaster House. It was rather good. We got in and as we were introduced my noble friend Lord Lyell said "We're members of the war Lords". Halfway through a gunner general—I shall not mention his name—got up to say that he was very sorry, but the Secretary of State was not able to be there because he was in the Commons on a three-line Whip. On one or two occasions, I have managed to get from here to Lancaster House in a government car in four and quarter minutes. I could not understand why he could not turn up. As the gunner was there, I thought "Never mind". I remember something I learnt in the Navy: "If I wasn't a gunner I wouldn't be here—fire one". That is the way to determine the distance between the salvos in a royal salute. I was a bit put out by that.
	In my days of trade I always had tremendous respect for our defence sales team abroad. It was quite brilliant, but where has it gone? Where is the responsibility? Who is the Minister now? I thought it was my duty to do a bit of Daphne Park-ing and find out what and how it worked. DESO, as it is called—I call it "deso", but other people call it "diso"—has moved to—UKIP, is it? No, it is UKTI—United Kingdom Trade and Investment—which replaces part of the Department of Trade. The Board of Trade, which always used to have the Minister of Defence and the First Lord of the Admiralty and the Archbishop of Canterbury on it, has gone to UKTI. UKTI is a non-ministerial government department. It reports to the Foreign Secretary and to the beer garden—no, to the British Enterprise something or other, a new body, which is its other partner. It does not report to the Minister of Defence in any way. The Minister of Defence has no relationship with it whatever under the current ministerial code. Here in the Lords, the noble Lord, Lord Digby-Jones, represents part of that side—UKTI—someone else represents something else, but part of it, which used to be within the Department of Trade and Industry, is the space and satellite side which belongs to the university and technological something ministry. Will the Government please tell us who is now responsible for defence sales? It cannot be the Minister because it does not report that way.
	Now I come to the importance of defence equipment. We used to produce some of the best defence equipment in the world, and we still do. We had a dedicated ministry. I remember standing here in the 1970s fighting like mad for two days to try to save our shipbuilding industry because we would not be able to build warships any more. Of course, it was nationalised, it went and much of the technology disappeared overseas. That still comes to the fore today. It is, perhaps, more worrying that we have lost most of our manufacturing base. That no longer matters for the balance of payments because it is more than compensated for by service industries and financial services. The biggest single group in manufacturing is the defence industry. If it has only the UK defence budget as its market, it will fade away and we will gradually lose those skills. It is already happening to some extent to the French, but if we are unable to market our equipment abroad to allies and potential allies, we will find that in the end we will have a deficit of technology that we cannot make up other than by acquiring it from other people. Will the Government give considerable thought to this and get over the worry that perhaps they are no longer interested in defence?
	We have committed forces to a place where I would never have committed them without knowing what we were going to do in future. Last night, I took the opportunity to do a bit of lobbying myself and, as my noble friend Lord Lyell knows, I went around to all those people who are our former allies or who could be our allies—the Australians the New Zealanders, the Canadians—to ask what we could do together, and we had discussions about where the next trouble spots might be. For example, as the Soviet Union has stuck a flag in the bottom of the Arctic and the north-west passage is open, it may not be long before there are more attempts to gain raw materials and other resources there. And in the south Atlantic, off the Falkland Islands, with all those countries that have claims, including Australia, New Zealand and every one of the Polynesian islands that plays rugby, it may not be long before there is a Soviet presence there—a nuclear submarine, an investigation vehicle, certain technological developments—laying claims.
	When my team was advising and helping after the Falklands war, two things came out of it: the remarkable performance of some of the kit there, such as Rapier, which led to sales of Rapier to Turkey. Battle-proven British equipment has twice the value of that that is not battle proven. At that time, Lord Shackleton—for whom I had enormous regard and who taught me a lot—asked for a proposal for what could be done with the Falkland Islands. We sat and thought and suggested we establish SAFE—the South Atlantic Fund for Exploration and Development. Everybody who has a claim to the Antarctic should be required to set up a company, a base or an office in Port Stanley. It should have a head man, a chauffeur, a cook, a gardener and everything else. That would have restored the economy of Port Stanley.
	These are little areas, but then you move a bit further. Take a compass and stick it in with the points showing a 650 mile radius—the distance a plane can fly—and ask how will we be able to service military operations in those areas. Stick it in the Straits of Hormuz. I remember that when I was trying to save HMS "Eagle", I was told that we could manage 650 miles out to sea with a Buccaneer, provided that it was fully armed and had twin fuel tanks.
	I leave the thought that the world is a most interesting place, but one should look at it from the poles as well as from the middle. I will provide all my support to the Government on defence things. As a suggestion, because I have a new project called Project Excalibur, I will ask the Government whether they will support me. I am proposing to take the clean feed of this debate, turn it into a half-hour programme and ask the Government if they will circulate it to all regiments and members of the Armed Forces worldwide. They will then realise the support that exists here in your Lordships' House.

The Earl of Sandwich: My Lords, I warmly thank the noble Baroness for this opportunity. I hope the Government Front Bench will forgive me for raising questions about our role in Afghanistan which came up in the gracious Speech, but which the Minister was unable to answer. The central question for me has become a focus for seminars in every NATO country; is our military intervention in Afghanistan an anti-terrorist measure—a form of self defence—or is it to secure reconstruction and development for Afghanistan? How can it be both? Should soldiers be aid workers? I will draw no parallel with Iraq, although there are obvious similarities in the way we have approached post-conflict reconstruction in both countries.
	Because of my allegiance to a number of humanitarian NGOs—although I am not officially speaking for any of them—I see soldiers primarily as protectors rather than aid workers, but I am not one of those who in principle opposes the involvement of the Army in development. There have been many occasions in history when soldiers have restored infrastructure and rebuilt bridges and roads, which of course benefit the population. And there are recent examples in Sierra Leone, where UNAMSIL forces rebuilt mosques, or in the Balkans where our soldiers were working with refugees in Macedonia and lives were saved by soldiers. However, the conditions have to be right. The difficulty comes where there is no obvious correlation between war and reconstruction. In Helmand province and along the border with Pakistan, territory is repeatedly being captured and lost. As my noble and gallant friend Lord Bramall said, villages and farmland are devastated and civilian lives are continually risked and sacrificed. This is a frequent consequence of civil war in countries such as Sudan or Lebanon, but it is rarely today associated with foreign military intervention.
	There is a famous line in Tacitus, which the soldiers will know:
	"Ubi solitudinem faciunt, pacem appellant"—
	where they make a wilderness, they call it peace. Of course that comment was made in very different times. There was never such an intention in Afghanistan. But what started in 2001 as the liberation of a country by an overwhelming force, approved by almost every UN member and intended to be translated quickly into a zone of peacekeeping, has turned into something quite different—and I think we all acknowledge that. Helmand is known as the "lawless province". Throughout the country civilians and Afghan aid workers are being attacked, and reconstruction work is held up in some of the formerly secure provinces such as Badghis, and even in areas closer to Kabul itself. We may be containing the Taliban, but we are not yet winning the hearts and minds of the people. There is still no clear allied strategy. Our military objectives in the south are becoming harder to define, let alone justify. NATO commanders are finding them out from their politicians because decisions now will dictate the way that the organisation behaves over a decade.
	The alliance is holding firm, but, as the noble Lord, Lord Chidgey, mentioned, there is overstretch everywhere, and there are clear disagreements between the US position and some European countries. Surely we should respect the position of countries that prefer to support security for reconstruction and not for a full-scale war in Helmand and along the Pakistan border which we did not foresee. Germany's constitution allows only training and not fighting forces, but their training unit is being tripled. The Defence Minister Franz Josef Jung said recently:
	"We need security and reconstruction and development: that is the wider concept . . . That's why I think these calls simply for more and more military involvement are misguided".
	The picture is complicated by the use of the provincial reconstruction team—the PRT—which is a clever combination of motives, which again was greeted with enthusiasm at the beginning. But students of PRTs—remembering its middle name is reconstruction—have shown that whatever the original model, Governments have strayed very far from it.
	Two of the PRTs have been widely quoted as "successful"' models: one was our own in Mazar-e-Sharif where the British NGOs testified to its usefulness and cooperation with the community and its independence of humanitarian work, and there is the small New Zealand PRT in Bamyan. The Bamyan PRT keeps out of aid projects, although Governor Sarabi longs for a US-style budget for development. The US PRT in Khost, for example, has provided nine villages with drinking water, and the Hungarian PRT in Baghlan has a similar project which is arguably a form of public relations as well as development.
	Our PRT in Lashkar Gah has contributed substantially through "quick impact projects", but these local projects should really be reviewed—I shall mention that again in a moment—because while encouraging the population, they cannot be seen as part of an overall development plan while a war is going on so close by.
	My wife and I visited the Swedish PRT which has replaced ours in Mazar last month, and once past the barriers and menacing looks we were treated with great courtesy. We paused by the memorial to Lance Corporal Steven Sherwood, aged 23, who died on 29 October 2005—he is one of the 257 mentioned by my noble and gallant friend Lord Craig—a reminder of the constant danger to our forces and our aid workers, even in the north; and we must be proud of them all. The noble Baroness, Lady Dean, and others spoke of the additional dangers they face. The noble Lord, Lord Malloch-Brown, in his maiden speech on PRTs said that in more stable provinces,
	"we must try to graduate"
	from a defensive model to one
	"where development agencies can act independently".—[Official Report, 11/7/07; col. 1473.]
	No one could see the Mazar PRT as a friend of development; it is a bastion of military force above the town, hidden behind concrete and barbed wire, and, as a citizen, that is all you would see. A few inquiries showed that contacts with the local population were minimal although they went out on foot patrols. It is hermetically sealed and does not even purchase goods from the local market. Instead of meeting people and getting involved with development, its forces hardly venture out unless they receive an urgent security call, which is rare, because it is one of the safest places in Afghanistan.
	A recent study by the Overseas Development Institute's humanitarian network shows that outside forces tend to define peace and security in their own terms, with little reference to the aspirations and priorities of local people. It concludes that, where security is of paramount importance, assistance from the military is likely to continue but that local communities and governments must be more involved in decisions affecting their future. I doubt if that is happening in Afghanistan. Afghanistan is testimony to the continuing need of the international community to adhere to that obvious principle. So I ask Her Majesty's Government to undertake a review of the contribution of the provincial reconstruction teams and of the impact projects to the reconstruction of Afghanistan.
	A couple of sentences from the Foreign Secretary during the debate on the gracious Speech still bother me because I know that he is concerned about hearts and minds. He said that,
	"the front line of terrorism in 2001 was Afghanistan, and it is again the front line today".—[Official Report, Commons, 12/11/07; col. 405.]
	Later he said:
	"The operations in Afghanistan . . . are test cases for the new NATO that we want to see".—[Official Report, Commons, 12/11/07; col. 407.]
	Added together, do not those remarks imply continuing uncertainty about the purposes of our military mission in Afghanistan? Is it really sensible to regard Helmand as the front line of terrorism in the world today in the same way as we saw the Taliban as an inspiration for al-Qaeda in 9/11? And can we really justify the Afghanistan campaign as a testing ground for NATO in the future, which as we have heard from my noble and gallant friends, is definitely the case? It is an excellent example of our Army and our Armed Forces in action. I would be grateful for clarification from the Minister, because I am sure she shares my view that the British people, while very supportive of our gallant forces, our reconstruction efforts in the country and our new ongoing diplomatic initiative, need much more reassurance about our military role in Afghanistan and elsewhere.
	Finally, I welcome the new Prime Minister's commitment to more parliamentary involvement in war-making powers and look forward to taking part in a minor way in the new Bill, with the proviso, which we heard from the noble Lord, Lord Marlesford, that our Members of Parliament learn a little more about the Armed Forces.

Lord Gilbert: My Lords, like every other Member of your Lordships' House, I am very much in debt to the noble Baroness, Lady Park, for raising this as a subject for debate. In the short 10 years for which I have been a Member of your Lordships' House, I have never heard a debate of such seriousness, quality and one-sided passion from men whom I did not think were necessarily given to passionate speech.
	I have a few words of friendly advice for my noble friend, whom I very much congratulate on her appointment. I wish her well without any reservation whatsoever. I hope that she will understand that when I have a few remarks to make that are critical of Her Majesty's Government, they do not reflect in any way on her personally but are given in the hope that she can avoid some of the mistakes that her colleagues—and, dare I say it, her predecessors—have made. There has already been reference to the extraordinary appointments made by the present Prime Minister at the Ministry of Defence.
	I think that it was the noble Lord, Lord Marlesford, who mentioned that which we all know: that the first duty of any Government is the defence of the realm. I am wickedly tempted to say to my noble friend that her first job when she gets to her desk at the Ministry of Defence this evening is to send a signal to all naval officers that they acquaint themselves with the borders of the realm that they are supposed to be defending, which seems to be something that one of our Ministers—was it as recently as yesterday?—was himself not acquainted with.
	I have already said what I think about the double-hatting of the position of Secretary of State for Defence with that of the Secretary of State for Scotland. I will say it again unambiguously. I think that it is a disgraceful appointment. I have been to see my Chief Whip; I told him that I was going to say this; and I am going to go on saying it at every possible opportunity until the appointment is revoked. It is a disgrace. It is an insult—not merely to those who are serving in Her Majesty's forces but to their families, and that is what I take personally very hard indeed.
	This is my friendly advice to my noble friend. I hope very much that when she replies to the debate, she makes no attempt to justify that appointment but rather gets up to say that she will convey the unanimous sentiments of this House to her right honourable friend on that point. If she seeks to defend it, she will do herself great damage. I intend to dwell on that for a moment. This appointment reflects not only on the Prime Minister; it also reflects on the Secretary of State for Defence, because he should not have accepted it. As I said, the sooner that it is revoked, the better.
	There has been discussion of resources, which goes to the heart of whether we are able to equip and sustain our Armed Forces appropriately. I very much endorse what the former Secretary of State, the noble Lord, Lord King, said on the subject of the mantra of Her Majesty's Government increasing resources in real terms by a modest percentage year after year.
	I very much hope—again, this is a friendly word of advice to my noble friend—that she does not seek to defend the 1.5 per cent figure or repeat it as a justification for the theme that Her Majesty's Government have the Armed Forces at heart. When she gets back to her office—she is a very sophisticated and intelligent Minister—she needs to find out what that 1.5 per cent nominal increase in real terms represents in the decrease in capability, given the inflation element in defence equipment year after year. There is no getting away from it: 1.5 per cent overall in the budget represents a reduction in capability year after year. I very much hope—this is friendly advice to my noble friend—that she does not try to call in aid that 1.5 per cent figure as evidence of what the Government are doing for defence, because we are steadily going downhill as a result of that overly modest contribution.
	My noble friend faces great challenges at the defence procurement end of the Ministry of Defence. She will suffer from the mistakes of her predecessors—no doubt I made a few in my time. I very much hope that when she gets there, she will realise the one thing that we all ought to realise: there is no such thing as a stupid question. I hope that she will not be intimidated by the jargon and the often overbearing attitude of those who are advising her. Here I am going to say something sacrilegious, which will no doubt offend many noble Lords with whom I have agreed wholly up till now. Those people will not always tell you the truth. People do not like to admit that people are not telling them the truth, because they realise that it is a reflection on them—or rather of what other people think about them. It is very difficult to take that on board.
	I tell my noble friend—again, this is a piece of what I hope she will regard as friendly advice—that I once had a conversation with a former Conservative Defence Secretary at a conference overseas. He rose to a far greater height than me—he became a Secretary of State and member of the Cabinet. I said, "You lucky fellow, didn't you enjoy it?". He said, "Yes, except that they lied to me". I hope that my noble friend tucks that away as something that she must recognise will happen from time to time. Do not be afraid of asking the stupid questions.
	As I said, my noble friend will be the prisoner of various decisions taken in the past, some of which she will not be able to influence or reverse. To me, for example, one of the most classic ones relates to the Trident missile system, of which I am a great supporter, and I am a supporter of it having a successor. But it is quite beyond me why we in NATO pay good money for a missile system that is delivering thermonuclear warheads with an accuracy of a CEP of a handful of metres. The joke used to be that you could not only hit Moscow, you could put it into the men's room in the Kremlin. Frankly, what on earth is the difference, when we have a warhead with a destructive capability many times that which we launched on Hiroshima and Nagasaki, whether it ends up at that end of your Lordships' Chamber or at the other? We seem to be paying for a grotesque, otiose accuracy. My noble friend may be in a position to influence that when it comes to the next generation of ICBM that this country will procure. I hope that she will consider that.
	I move on from Trident to Typhoon, of which we are all immensely proud. I suggest to my noble friend that when she gets back to her desk, she asks a couple of questions about Typhoon's agility. It is a marvellously agile aircraft. I do not know whether she is familiar with the way that airmen measure agility. They do it in terms of the number of G-forces that a plane can sustain when it is being put through its most violent manoeuvres before it falls apart. We pay a great deal for the agility of Typhoon. I am not going to disclose the figure—I happen to have it at the back of my head, but I will not disclose the figure in your Lordships' House—but I suggest that when she inquires about the agility of Typhoon, simultaneously with acquiring the figure for its maximum agility, she acquires the figure for the maximum G-force that the human frame can sustain. She might be interested in comparing the two answers.
	When she knows that the Saudis are buying 20 Typhoons—I forget how many it is, but that is not important—I suggest that she urges that the contract be made for them to buy them not from British Aerospace but from the Royal Air Force. That will release funds for the Royal Air Force to get a much more cost-effective aircraft. When the Minister talks about Typhoon, on which we are spending billions and billions of pounds, I suggest that she acquaints herself with radar cross-section, asks what the comparable radar cross-section is on modern American fighter planes, and sees what she is getting for our money.
	There are many reasons for these misallocations of defence expenditure. Some are for political reasons in our country. I remember when I had to go on buying frigates from one shipyard many years ago. I do not mind telling your Lordships that that shipyard was Cammell Laird. Frigates were cheap in those days. A frigate cost £100 million. Frigates from Cammell Laird cost £120 million. I was made to buy them for political reasons—for employment policy and regional policy—all of which were very good and noble things but which should have been charges not on the defence vote, but on the department of employment's vote or the department of the environment's vote for regional policy. I very much hope that my noble friend will screw her courage to the sticking place, although it will be very difficult. I failed, so I shall not be too censorious of her if she does not succeed, but I hope she will realise that she should fight against that.
	The Minister will find my very last point to be about much the same sort of nonsense, in that she is required from time to time to buy some—I am trying to use politer language today—Euroslobbering make-work project such as the A400M, and I suggest that she acquaints herself with all the reasons why it is preposterous and totally unnecessary. I hope very much that she will put all her energy behind getting the fifth C-17, which we were promised I think a year and a half ago but which has yet to appear, and which is the single most necessary and urgent ingredient in defence expenditure.

Earl Attlee: My Lords, I am grateful to my noble friend Lady Park of Monmouth for introducing the debate. It is always a great pleasure to follow the noble Lord, Lord Gilbert, whose contributions I always enjoy. I am relieved that he did not fully accurately describe the A400M. I remind the House that I am a serving officer in the Territorial Army. I am also the Opposition Front-Bench spokesman on maritime and shipping matters, but I speak from the Back Benches today.
	I have a bit of good news. Our Armed Forces currently seek to maintain a comprehensive and balanced capability, and they do. Unlike many other countries, we do not have several hundred main battle tanks and a similar number of fighter aircraft, but no ISTAR or deployable logistics system. Only a few other countries—the United States, France and possibly Russia—can deploy at brigade strength far overseas. We also have the political will to use our military capability for the greater good. What a pity we are not yet using the comprehensive approach at the strategic level in Whitehall.
	Almost every problem that we have talked about today derives from operating far outside defence planning assumptions. The noble Lord, Lord Chidgey, mentioned the problem, as did many others, but he did it particularly well. To recap, our current defence planning assumptions allow us one medium-scale enduring operation and one small-scale operation that is possibly enduring. Medium-scale means a brigade; small-scale means a battalion. What we actually have is double medium-scale plus; the plus refers to such assets as ISTAR, special forces and everything else that we need to support two very difficult operations.
	This is not just about the tour intervals—the aspiration for 24 months between operational tours. At all levels, we are training for the war, not for war. We are becoming very good at fighting this counterinsurgency operation, while neglecting the capability of operating on a large scale—in other words, at divisional level—on a proper war-fighting operation. Essential battle training exercises in Canada are being cut back, and few are experiencing the Medicine Man exercises. A very senior officer explained to me in a presentation that combat power could be expressed as kit times personnel times leadership to the power of TEE—training, education and experience. We are developing an officer cadre with a gap in TEE. This is not just about training, however, but about the kit, the platforms, the tanks, the protective ability and the helicopters, which are all being worn out far faster than planned for because we are operating far outside the defence planning assumptions.
	The noble and gallant Lord, Lord Guthrie, touched on his SF role. Only a small percentage of our Armed Forces have that innate incredible skill set that makes them suitable for service in the Special Forces. We cannot easily train more SF without diluting their capability, but we are using them far too much and we cannot go on like this. The noble and gallant Lord, Lord Boyce, talked about robbing equipment. On the land side, the current euphemism is "cross-servicing". Again, this is just another symptom of operating far outside the defence planning assumptions. We are also extremely vulnerable to another military challenge appearing from nowhere—where else do they appear from? I take it that the Minister agrees that we cannot deploy on large-scale—division-level—exercises or operations. Until 2015, there is no possibility of engaging on Exercise Saif Sareea.
	We might have enough strategic aircraft to support one medium-scale operation, but we do not have for two. The aircraft that we have are the VC10 and TriStar aircraft. These are extremely unreliable, they are not used anywhere else in northern Europe, and they have a very serious effect on manpower when they disrupt rest and recuperation flights. We cannot continue to operate outside the defence planning assumptions for so long. As the noble Lord, Lord Chidgey, said, we can do so for a short while but we cannot do so for years. If we do, we must expect to have our posterior kicked at some stage.
	In a similar way, the noble and gallant Lord, Lord Bramall, and the noble Viscount, Lord Slim, alluded to what could go wrong. We must either cut our commitments or increase our resources. Since the latter is unlikely and would take time to implement and take effect, we must cut our commitments. We have 4,000 troops in Iraq, a brigade plus, but the Americans have 160,000. We cannot affect the outcome in Iraq—only the Americans can do that. My noble friend Lord Marlesford said that the Iraq operation could sink or swim, but actually it is beginning to do rather better.
	We can affect the outcome in Afghanistan, and to a disproportionate extent. However, we are severely hampered by having to split our military power across two campaigns. It would make a huge difference if we were to get out of Iraq completely. It is obviously beyond my pay grade to say that we should, but if we did, it would not be because of the rights or wrongs of the situation or the prospects of success, which as I have said are getting better, but because of a strategy of concentrating the physical, conceptual and moral components of our fighting power on one operation for strategic reasons. Moreover, success in Afghanistan is essential to the future of NATO, as pointed out by many noble Lords.
	When the Minister comes to reply, she will no doubt pray in aid approximately £2 billion-worth of urgent operational requirements, but is it the case that there is no budget line for the support of these urgent operational requirements—a budget line for the maintenance of equipment? I refer to overhauls, spare major assemblies and new tyres to replace those already worn out. Of course, UORs will be supported and the funds will have to come from elsewhere, but I give notice that I may challenge the Minister if she boasts about UORs but does not state how they are going to be supported. The Minister may also use the "jam tomorrow" argument regarding the equipment programme, but is not the incidence of expenditure unsustainable because we have the carriers, the carrier aircraft system, the future rapid effect system and Trident all reaching their peak period of expenditure at more or less the same time?
	There has been much talk about the military covenant. I am extremely concerned about the delayed inquests into operational fatalities, a point raised by my noble friend Lord Selkirk, but I shall take a slightly different view. In many cases, there have been delays of over three years. It is partly a question of resources at home, not in theatre. This means that a bereaved family cannot achieve closure, and a bereaved wife cannot possibly consider starting a new relationship until the inquest is complete. Not surprisingly, the lawyers do nothing to speed the process up. A court martial tribunal is comprised of serving officers who can put the events described to the court in their proper context. I frequently hear coroners severely criticising experienced officers. It is easy to be wise after the event and to adhere to the fiction promoted by lawyers and the media that casualties and fatalities on operations can be almost entirely eliminated. Another difficulty is that, in some cases, deceased servicemen or immediate comrades may be partially responsible for the death. This is a sensitive issue and no one in the MoD or the chain of command would want to point it out in an individual case. But I have certainly been invited, along with my comrades, to do something on operations that was toe-curlingly stupid. We just got on and did it, and fortunately we got away with it.
	The coroners Bill will not make an appearance during this Session, and unfortunately there is insufficient time to pursue the point further today.

Lord Addington: My Lords, I am extremely nervous about summing up a debate that has featured quite so much expertise. One thing that has become apparent is that we as a political class are only just starting to wake up to the reality of the fact that we are involved in two wars which could last for many years, indeed possibly even for decades. Our forces are deployed to a level that was never planned for, and that is a historical problem which has affected all Governments for the past couple of decades. We did not expect this to happen and we have not planned for it. Moreover, we do not have enough intelligence—I use the word in the sense of information gathering—to enable us to decide what we can do successfully. We do not know how long these things may go on for, and that is the backdrop to the entire debate.
	We have to square up to the fact that these wars we have chosen to become involved in have to be fought and won. That is certainly the case in Afghanistan, but I agree with the noble Earl, Lord Attlee, that I do not think we should have gone into Iraq in the first place and that we could probably leave without affecting the outcome. Unless we back up our forces with sufficient resources and political capital, we risk encouraging the groups we have set out to confront. We have to ensure that we are there for the long haul. This, however, will lead to considerable attention being drawn to the way in which we have planned, the way in which we are prepared to spend money and the priorities that we in the political world give to this expenditure.
	The case for a new Strategic Defence Review has become overwhelming. It has already been said that the attempt to take a peace dividend at the end of the Cold War has led to our Armed Forces being, if not cut, slightly whittled away and allowed to wither. We did not think that there would be any great long-term commitments so we became slightly more adventurous and thought that we could make interventions at a lower level. Ultimately, this policy has led to our troops being greatly stretched.
	As to the covenant, I thank the Minister for replying to the questions I raised in the debate on 7 November. I am afraid I have not studied his reply in any great depth as I picked it up at two o'clock today. I have covered the situation of our troops at home. The second part of the covenant is to make sure that troops in the field have what is required to win a conflict with the minimum casualties. However, as has been proved, casualties will be an ongoing factor for the foreseeable future. Not only must we make sure that our troops have the right weapons in the field but—as has been pointed out by people who, if they do not know, no one does—the right training and equipment properly to prepare them to take the right action. This will in turn enhance the chances of a successful outcome and cut down on casualties. Our troops in the field should have this backing, this logistical support, and sufficient colleagues to call on to meet the challenges in front of them. It would be a positive note if we could have an assurance that this Administration will never undertake another military operation unless that back-up and support can be made available to those involved. These are wars of choice. We are not defending our own borders or those of our allies; we chose to take part in the action.
	What options would be available to us if there were to be a Strategic Defence Review? We could carry on as we are, looking at the budget and trying to find a little more money to maintain a general cross-capacity; or we could pump more money in to make sure that we can do all the things we have traditionally tried to do. We could consider what is to be the role of the Armed Forces in the future. Do we have the capacity to fight the kind of war we are fighting in Afghanistan, the capacity to fight an armoured rapid movement war, the capacity successfully to deploy a fleet with the ability to wage war by itself—or do we withdraw from such operations? Do we decide that there are things we cannot do that we have previously said we should do? Do we decide publicly to admit that we can no longer take independent action?
	These decisions would be enhanced if we could achieve a political consensus by opening up the discussion to those involved. This would require a degree of political courage by all concerned. Are we going to say, for instance, that we will take certain types of action only in conjunction with our primary ally, the United States? This is not an easy decision to make, especially for those on these Benches who have not liked the political decisions of the United States. However, it is a decision we have to take.
	What are we going to do in the future? At the moment, the deployed forces are stretched and we are in danger of starving of resources the branches of the Armed Forces which are not under the spotlight at the moment. This may affect their capacity to engage in the future. We should not even contemplate leaving our Armed Forces exposed in this way and still give consideration to the possibility of future deployments.
	We must remember the covenant. These are our service personnel. They are potentially not only in danger but that danger is enhanced and defeat may well be inevitable. We must grab hold of this problem. We have heard from all around the House that if we do not take a grip on this situation we will simply muddle on and through, constantly undermining and endangering our personnel. We must look at what is required to support them.
	I turn to the matter of the covenant. Are we going to continue to ensure that not only do our Armed Forces personnel have sufficient personal resources to keep them involved and interested in the forces, but that it remains an attractive career in the future? The noble Baroness, Lady Dean, said that it was not just a question of pay. I have recently spoken to senior serving officers who said that their soldiers, on coming back from operations and covering for firefighters during the recent dispute, had said what an easy job it was and how much better paid firefighters were. There is a perception that they are undervalued compared with, for example, policemen. It does not matter that they are comparing chalk and cheese—and indeed a firefighter may have a distinct opinion on exactly how good a job the soldiers did—but the fact that they feel that way is the most important thing. It is not just a question of pay, but if your accommodation is not right, you are doing more service without the chance to do the right training, your wives and girlfriends—this is predominantly from a male perspective—are saying, "It's either me or your job" and your children are not getting the right education or are having to move schools, the issue of pay will certainly be one of your grievances.
	The idea that you are being undervalued is probably as important as any one action. The idea that you are held in esteem has historically attracted people to the armed services, and we should be prepared to take action that enhances that feeling. I forget exactly who mentioned it, but merely saying, "Aren't our Armed Forces wonderful?" does not really cut it. There are only so many times a man can be put into a dress uniform and paraded around while people say, "Isn't he wonderful?" before he starts wondering about his pay packet and his housing.
	We have to try to address the situation. We have to admit that we are fighting a war and asking our servicemen, when they don a uniform and go on operations, to risk their lives as the direct result of someone else wanting to kill them. We cannot get by on the policy that was described to me as "jogging along" as we did during the Cold War. We have to take more assertive action, such as identifying targets and establishing what the Government think are the minimum standards of support for servicemen. Unless we achieve these two things and marry them together, we will have a failure at some level. It may not be this time around and it will probably not be dramatic or even obvious at the time, but we will build up a great probability of failure at some point in the future.

Lord Astor of Hever: My Lords, it is a well established convention in debates on defence at a time when the lives our Armed Forces are at risk that the Opposition should seek to find and express consensus with the Government. Sadly, that cannot be the case today. On every one of the specific points picked out by my noble friend Lady Park in the Motion she has advanced with her usual skill, we are strongly critical of the Government in their actions and, even more so, in their omissions.
	I do not criticise the Government for their words. From the Prime Minister to the Secretary of State, the words are often admirable. In his recent speech in the City, the Prime Minister said,
	"let me affirm our commitment that we ... will at all times support and strengthen our armed forces".
	Laudable words, but the speech was seriously inadequate in its proposals for action, particularly in the light of what my noble friend Lord Marlesford said: the defence of the realm is the first priority of government.
	On Sunday, in an article entitled "The Armed Forces are safe in my hands", the Secretary of State wrote:
	"This Government is demonstrating how it values our forces and their families by ensuring it delivers the support they deserve",
	and,
	"On my recent visits to Iraq and Afghanistan, troops gave"—
	me—
	"positive feedback".
	Mr Browne's words of reassurance will sound hollow to many service men and women.
	I am sure that all noble Lords will have seen elements of General Dannatt's staff briefing team report. The bleak reality, based on interviews with thousands of soldiers, is an Army at the end of its tether, with troops feeling devalued, angry and suffering Iraq fatigue. There is a profound level of dissatisfaction with the conditions under which the soldiers have to live and serve. It notes, for instance, that,
	"delays to military inquests are a disgrace",
	that leave is often cancelled or constrained because of operational overstretch and that housing is often inadequate. We are sending soldiers out to Afghanistan to fight pretty much 24 hours a day. They then come back to what my noble friend Lady Park described as disgraceful housing. How can one sustain an Army like that? On housing, I hope that the Minister will answer, if necessary by letter, the question of my noble friend Lord Selkirk about the Treasury and the financial windfall from the sale of Chelsea barracks.
	The report to which I referred earlier strongly criticises the "pay-as-you-dine" policy of making soldiers pay for what they eat, which many in the Army call a "disaster" and is creating a Pot Noodle-and-sandwich culture among junior soldiers. If the Government had asked those who have the interests of their men and women most at heart, their commanding officers and their senior non-commissioned officers, they would have known from the start the disastrous effect that these policies would have.
	I echo the gratitude of my noble and learned friend Lord Mayhew and the noble and gallant Lord, Lord Inge, to the Chief of the General Staff for the outstanding briefing that many of us attended in Portcullis House.
	Many noble Lords and many noble and gallant Lords, including the noble and gallant Lords, Lord Guthrie, Lord Boyce and Lord Bramall, have argued that these conditions are largely the result of a decade of underfunding by this Government. It has not been lost on the armed services that the Government are willing and ready to risk more on bailing out the financially inept bank, Northern Rock, than is spent on the entire defence budget.
	The noble and gallant Lord, Lord Inge, asked me about a future Conservative Government's approach to defence spending. A constant choice needs to be made between commitments and resources, but we will spend what is required to guarantee the security of the United Kingdom. We agree with the noble and gallant Lord that we must get our existing battalions up to strength.
	Many noble Lords and noble and gallant Lords have mentioned the military covenant, which the noble Viscount, Lord Slim, said had been broken. The fundamental relationship that must exist between a country's Armed Forces and its Government has been continually undermined by this Administration, leading to the final insult of a part-time Secretary of State who doubles up as Scottish Secretary. I am sure that the Minister has listened carefully to what all ranks of the Armed Forces have said to her about the downgrading of this great office of state—we hear it all the time. I hope that she will bring her substantial political experience to bear on this undesirable development.
	The Chief of the General Staff is clearly unhappy with the ragged state of the military covenant. He says that it is "clearly out of kilter" and that the effect of trying to mount ambitious campaigns in Afghanistan and Iraq with insufficient manpower is,
	"mortgaging the good will of our people".
	Lieutenant Colonel Stuart Tootal, the commander of 3 Para, reflected the mood of the rank and file when he resigned last Friday in protest at the troops' poor pay, the lack of equipment for recruits to train with, the state of Army housing and the lack of dedicated facilities for injured soldiers. Colonel Tootal led his men in some of last year's most intense fighting in southern Afghanistan's Helmand province, for which he was awarded the DSO. During his six-month tour between April and October, Colonel Tootal had to contend with lack of food, water, ammunition and insufficient helicopter support.
	Two hundred and fifty-seven British military personnel have lost their lives since combat operations began in Iraq and Afghanistan six years ago, but those fatalities tell only part of the story. Many soldiers have returned with life-changing injuries and for every soldier killed or injured in action scores more return home traumatised by the horrific scenes that they have witnessed. I join the noble and gallant Lord, Lord Guthrie, in paying tribute to the two soldiers from the SAS killed yesterday. I also pay tribute to the courageous work that the SAS are doing and to the work of the Special Boat Service.
	The noble Baroness, Lady Dean, and my noble friend Lord Selkirk mentioned coroners' inquests. Servicemen and women rightly expect the Government to look after their families, whatever happens to them. How are Her Majesty's Government addressing that area? They are doing so by withdrawing the promised Bill to improve the coroners' courts.
	Several noble Lords mentioned procurement and, particularly, the defence industrial strategy. My noble friend Lord King and the noble and gallant Lord, Lord Bramall, pointed out the very good work that the noble Lord, Lord Drayson, did in that area. The noble Baroness, Lady Taylor, the Minister, told the Defence Select Committee yesterday that the second version of the industrial strategy, which was to be published next month, will now be delayed. I hope that that is not an indication of future drift in this area. Can the Minister give a rough timescale for publication?
	My noble friend Lord Selsdon mentioned the Defence Export Services Organisation, whose abolition has no supporters outside those who want to hobble Britain's defence sector. According to Jane's Defence Weekly, President Sarkozy is now taking personal charge of defence exports in France and is clearly setting up a structure very much based on DESO. Can the Minister give the House an update on proposals to reallocate DESO functions to UKTI? What interim arrangements are in place to assist defence companies during this reallocation of DESO's functions and which Minister is currently responsible for defence exports?
	On the Navy, my noble friend Lord Luke asked whether all eight Type 45s would be built and how much co-operation there would be with French yards over the carriers. The noble and gallant Lord, Lord Boyce, mentioned previous commitments. The budget for Trident will not be coming out of the conventional defence budget. On the Army, my noble friend Lord Marlesford mentioned FRES. Will the Minister give some assurance on this vital piece of equipment? On the Royal Air Force, my noble friend Lord Selkirk asked about the Tornado front-line squadron and Nimrod.
	Various questions were asked about ongoing operations. Equipment attrition rates need to be actively recognised by and compensated for by the Treasury. My noble friend Lord Attlee mentioned UORs. Equipment attrition rates are in competition with the long-term equipment programme. There is a shortage of equipment in Afghanistan and Iraq, and the Minister will, we hope, update the House on progress in Iraq and what planning assumptions there are for any commitment of the Armed Forces to Afghanistan beyond 2009-10. We agree with the noble Lord, Lord Chidgey, that the operation in Afghanistan should not be allowed to fail. We are also disappointed that other NATO member states are not prepared to commit troops or equipment that would ease the demands on our front-line troops and those from Canada, Holland and Denmark.
	The noble Baroness mentioned problems with recruitment and pointed out the unacceptable numbers of all ranks that are now leaving the services. The Public Accounts Committee in another place is concerned that the MoD lacks a suitable long-term strategy for personnel recruitment and retention. What is Her Majesty's Government's response?
	I have a real fear for the well-being of our Armed Forces. I am fearful that too much damage has already been done to the fabric of their lives. I am fearful that cuts that have curtailed their training will reduce our operational effectiveness in years to come as well as cost lives. I am also fearful that all this will continue unless this Government make a real commitment and start to address their responsibilities seriously. There can rarely have been a Government who are held in so much disdain or are so little trusted by those serving on operations.
	The noble Lord, Lord Gilbert, said that this has been a passionate and one-sided debate. It has highlighted the dangerous world we live in and what a heroic job our Armed Forces are doing in Iraq and Afghanistan. Do not our Armed Forces deserve better than, as the noble and gallant Lord, Lord Craig, said, a Defence Secretary with only a part-time interest?

Baroness Taylor of Bolton: My Lords, I congratulate the noble Baroness on securing the debate. I am sure that she is very gratified by the number and quality of the speeches that we have had and by the serious way in which this debate has been addressed. I was very pleased that she put her concerns in context and acknowledged that there have been problems for a very long time, including under her Government. We should not forget that many of the problems that we are addressing are historic in nature, as is a great deal of the problem that we have on defence expenditure.
	The contributions that we have had have been serious and informed. I respect the views of those who have spoken, even if I cannot accept them all. I will endeavour to respond to much of what has been said, but it would be impossible to respond to every detail. Where people have asked me to write, I will. I hope to respond to some of the themes that have run through the speeches, because certain key areas concern many Members of the House.
	I start by stating this Government's gratitude—the debt of gratitude that we all have—to the members of the Armed Forces and those who support them around the world, in particular the service men and women who are based in Iraq and in Afghanistan and who are playing an indispensable role, despite very difficult and dangerous circumstances. They can be justifiably proud of what they have done to help the security and stability of those two countries and, along with many who have spoken this afternoon, I pay tribute to their professionalism and commitment.
	I will say a few words about Iraq to start with. The noble Lords, Lord Chidgey and Lord Astor, talked about the extra contributions that we would like to make in different places. We are working in Iraq with a very significant commitment, which we hope will decline in the not-too-distant future. There have been problems, as the noble Lord, Lord Chidgey, mentioned. He asked me about paratroopers and the availability of Challengers for training. I am told that 318 are available for training, so that should not be the problem that was indicated to him. He is welcome to come back to me with any other aspect of that matter.
	We have now handed over three of the provinces to Iraqi control. Iraqi forces have now taken on the primary role of providing security in Basra city. As the Prime Minister of Iraq confirmed on 29 October, the transfer of Basra province to Iraqi control will take place in December. That will be the last province within the British-led area to transition. This is a very significant achievement and we should be proud of what has happened there, even though our Armed Forces are still facing a difficult job in training and mentoring the Iraqi security force.
	Adjustments to the number of UK forces in Iraq are based on conditions and not on arbitrary timetables, as other Ministers have said in the past. This approach has allowed us to reduce the number of our forces in Iraq and gives us hope that we can further reduce our force levels in southern Iraq to around 2,500 from spring 2008. But we still have an important job to do. We will honour the commitment that we have made and remain in Iraq until we, the Iraqi Government and our coalition partners are confident that the Iraqi security forces can operate without our support.
	Several noble Lords mentioned the situation in Afghanistan, where we are deployed in support of a UN-authorised, NATO-led mission: the International Security Assistance Force. ISAF is there to support the Government of Afghanistan as they seek to extend their authority across the entire country, which is necessary to improve security and facilitate development and reconstruction. Our Armed Forces have already contributed significantly to moving the country from a pariah state that harboured international terrorism to one that is making progress in development. The noble Earl, Lord Sandwich, asked about the relationship between anti-terrorism activity and rebuilding a country. From our point of view, it is clear that in order to combat terrorism developed in that country, you have to help in reconstruction. The two go hand in hand. We acknowledge that it is a long-term commitment but we are determined that Afghanistan should not be allowed to become a failed state again. The noble Lords, Lord Astor and Lord Chidgey, mentioned that it would be helpful—and, I think, only reasonable—if other countries undertook their fair share of that burden, because that has not necessarily been the case in the past.
	A great deal of this debate has concentrated on spending and the defence budget. I was advised in a very friendly way not to mention the settlement, but I have to confirm that it was 1.5 per cent in real terms. I mention it because I need to point out that this is the longest period of sustained real-terms growth in planned defence expenditure since the 1980s. That is no mean achievement and something that we should not dismiss. Noble Lords may want us to spend more but they must recognise that there has been a very significant increase in the recent past. This new spending allows us to proceed with two new aircraft carriers. They will not be built in France, as the noble and gallant Lord, Lord Inge, suggested, although we will discuss the matter with the French because they have an interest in having a similar facility. We are also investing a great deal in issues that concern families, as many noble Lords mentioned in terms of the covenant. I will say a word about—

Lord Bramall: My Lords, I am sorry to interrupt the noble Baroness, but it would be most helpful, because it is very relevant to what she has just said, if she could provide—her department ought to be able to provide this—the exact rate of inflation of defence expenditure. Everything that she said about sustained growth is relevant only when you know what the actual defence expenditure is.

Baroness Taylor of Bolton: My Lords, I have heard people talk about defence inflation, which is what the noble and gallant Lord is referring to, and I have asked about it, because clearly every aircraft, ship and piece of equipment is technologically more advanced than its predecessor and therefore very often costs more. However, the capabilities of the new equipment that is being bought often mean that you require fewer of the relevant item than was the case in the past. So it is not simply a question of putting a percentage on defence inflation in the way that is sometimes suggested, nor is it simply one of looking at defence spending as a proportion of GDP. The situation is more complex than that because in the past 10 years we have had a very healthy economy and we are now able to spend more than we previously did on otherwise neglected areas such as health and education. Therefore, we have been able to maintain a great deal of defence spending while bringing up budgets in other areas. I remind the House that the UK is the second highest spending country on defence in the world, behind only the United States. Defence spending includes not only the defence budget but the additional costs of operations and urgent operational requirements, about which I will say something later.
	The Treasury has provided some £6.6 billion from the reserve to support the additional cost of operations, which includes £2.3 billion specifically for urgent operational requirements. That is an indication of the degree of government commitment. We have seen from the comments expressed by many serving officers—the noble and gallant Lord, Lord Guthrie, acknowledged this—that the equipment now in theatre is better than has ever been the case. That is right and proper, and we should place that on record.
	As many speakers have said, we need to balance the short-term and long-term defence needs. That is why we are looking hard at our longer-term needs, with things that we are going to buy such as the Astute class submarines and the Type 45 destroyers. There are problems and pressures in certain areas that we wish we could avoid and that we have taken action to do what we can about. The noble Baroness, Lady Park, mentioned helicopters in Afghanistan. We have acknowledged that we would like more helicopters there, but we have enough for essential work. We have recently purchased six additional Merlin helicopters and we are converting the eight Chinook mark 3s so that they are available to operations more quickly. Other measures, such as the recent deployment of Sea King helicopters to Afghanistan, will help to relieve the pressures on the forces that are already deployed there. We have made some progress there.
	Several noble Lords have referred to urgent operational requirements, and I shall clarify that situation. We realise that when deployed on operations the Armed Forces will face challenges that could not have been anticipated in the initial planning. In those situations, it is necessary to procure new equipment quickly to counter those challenges. Through the urgent operational requirements process, we have been able to provide significant additional equipment, including enhanced body armour and Bulldog, Mastiff and Viking vehicles, all of which are making a significant difference. Colonel Westley has said:
	"The UOR process was producing equipment we had asked for within our tour and that was a tremendous response".
	I was not sure why the noble and gallant Lord, Lord Boyce, was so critical of the UORs, because most people who have had experience of them understand that they have vastly improved the situation for those who are in theatre.

Lord Boyce: My Lords, I hope that the noble Baroness will not mind my interrupting her to clarify one point. A number of the UORs that are purchased are to put equipment into place that has previously been removed because of a lack of budgetary endowment in the defence budget. It is not new equipment; it is often equipment that was taken out in a budgetary spending round and is then reinserted to meet the urgent operational requirements. While the noble Baroness is on her equipment paragraph, as it were, many noble Lords have agreed that equipment in the theatre is satisfactory. The important point is that the second line, about to become the first line, is impoverished in terms of equipment. That is dangerous. People are putting their lives at risk because they cannot train on the equipment that they will meet when they get to the theatre. That is the problem that the Government are not addressing.

Baroness Taylor of Bolton: My Lords, much of the new equipment that we have developed because of problems in the theatre will be incorporated into mainstream planning. That is only normal and right. Perhaps I could tell the House of the new arrangement entered into with the Treasury for funding UORs and clarify the point that seems to have been misleading some people about the clawback that it was suggested might occur. The new approach with the Treasury means that, in the three years of the Comprehensive Spending Review, the reserve will continue to pay all additional costs of operations up front and will pay outright for UORs up to a mutually agreed total. Beyond that, the MOD and the Treasury will split the cost 50:50, with the MoD having to repay its share two years later, by which time there could have been adjustments in the programme. The Treasury will give an extra £200 million in 2010-11 to ensure that the new arrangements are cost-neutral to defence.

Earl Attlee: My Lords, will the Minister answer my point about whether there is any budget provision for the maintenance of UORs?

Baroness Taylor of Bolton: My Lords, once the UORs are adapted into mainstream equipment, they are dealt with in exactly the same way as anything else in terms of maintenance. That of course is covered by operational costs when the equipment is in operation.
	I wanted to say a word about the suggestion that the Treasury is clawing back more than the £2 billion spent already on UORs. That is not correct. The only difference is the new arrangements for the future; I have already outlined what they will be.
	Perhaps I may say a few words about such matters as harmony and morale. I was glad to hear Members of this House echoing Nicholas Soames MP, who said:
	"Anyone who visits the troops on operations will be amazed at the high standard of their morale".—[Official Report, Commons, 12/11/07; col. 440.]
	Noble Lords have explained why we should expect that to be the case in an operational situation and it is right that that is put on record, because there have been suggestions that morale is not always so high. It is important not only that morale is high, but that we acknowledge it and work to maintain it. We do not want to downplay the difficulties that some individuals and their families have been placed in and we realise that the scale of the operations has meant that harmony guidelines on intervals between operational tours have been breached for some personnel, as mentioned by the noble Baroness, Lady Park, and the noble and learned Lord, Lord Mayhew. The figures that I have suggest that the breach of harmony is less than 1 per cent for the Royal Navy and is running at 10.3 per cent for the Army and 6.2 per cent for the RAF. There are of course pinch points with particular specialisms that make this worse in certain areas, but those are the figures that we have. I have to say that we expect our drawdown of forces in Iraq, the Balkans and Northern Ireland to help us to reduce those pressures and we are hopeful that we will get the Armed Forces nearer to the normal operational cycle. However, we recognise the difficulties that exist for many people.
	Perhaps I may say a word about the covenant, which is important to many people in this House and many more outside it. A great deal has been said about the military covenant, so I must start by assuring the House that the Government are fully committed to meeting their responsibility for serving personnel, veterans and their families. We have overseen a very long-standing programme of improvements in service pay, accommodation, health and welfare provision and force protection. Although we recognise that more can be done, we are making real progress on some of these problems, which have existed for a very long time indeed, far longer than this Government have been in power. Unfortunately, I therefore have to reject what the noble Viscount, Lord Slim, said about the covenant being broken. I hear what he says and I understand his concerns and the concerns of many. However, the obligations are there and accepted. Our proposed changes in compensation, improvements to health facilities and—perhaps particularly—recently in accommodation are significant.
	I was asked about fast-tracking within the health service and whether it would apply to everyone. I say as an aside that there was a pilot project in Hull where all veterans were accepted in that way, and the Department of Health is assessing it with a view to rolling out improvements. I think that the House will welcome that.
	I should like to say a word about accommodation, another subject that featured significantly in the debate. It is another historical problem and people have been working very hard in recent years to improve the situation. For example, in the United Kingdom, 12,242 service family houses have been built or significantly upgraded in the past six years; the target had been only 7,100. The Comprehensive Spending Review settlement has guaranteed a ring-fenced £550 million, which, for noble Lords who mentioned it, I can confirm is from the sale of the Chelsea Barracks. It is ring-fenced money for investment in new accommodation and refurbishment. In addition, my right honourable friend the Secretary of State recently announced that a further £8 million will be made available over the next three years for the second phase of the single living accommodation modernisation project, which is 20 per cent higher than previous levels. It will allow 1,350 new en suite bed spaces to be built. As my noble friend Lady Dean said, expectations change and what was acceptable just a few years ago is not acceptable today. That is only part of our £5 billion commitment on accommodation over the next few years.
	I should say a word on inquests, an issue which has clearly caused concern to a number of people. I know from meetings with ministerial colleagues that the issue causes them great concern as well. The Ministry of Justice has recently increased funding to coroners' courts with a view to helping alleviate the backlog. We recognise the distress that delays can cause to the families of people killed in action. We are conscious of the problem and are keen to move forward and help with it.
	Mention was made of the new Command Paper that the Government will be introducing on personnel issues and related matters. We recognise a duty to serving personnel, their families and veterans. Earlier this month, my ministerial colleagues therefore announced that we will have a cross-government strategy for supporting members of the defence community. It will cover all areas of support, including accommodation, medical care, welfare and education. The work will be led my right honourable friend the Minister of State for the Armed Forces and will involve the military chain of command. It will outline future initiatives and measures, what we have done to date and how we can continue to make improvements. It will be the first time that any Government have developed a cross-Whitehall strategy for the Armed Forces.
	The noble and gallant Lord, Lord Bramall, mentioned the treatment of returning soldiers. That fits in well with our comprehensive approach, as we are going to have a parallel study into encouraging greater engagement, understanding and pride in the UK Armed Forces by the nation as a whole. I am sure from his comments that the noble Lord, Lord Lyell, would welcome that as well. I would like to make many points—

Lord Chidgey: My Lords, I am most grateful to the noble Baroness for allowing me to clarify one point about the Command Paper that she is promising us. Will she assure the House that the shortage of personnel in the military medical services, which I mentioned in my contribution, will be addressed as soon as possible and that we will not have to wait as long as it takes for government policies to come to the House in various papers?

Baroness Taylor of Bolton: My Lords, many other things are happening as well. My honourable friend the Parliamentary Under-Secretary in the department has looked at many issues, such as mental health, and has made significant progress. This is not the only avenue for development and it will not stop other things happening or delay the progress that is being made. I hope that that is encouraging.
	I conclude by reassuring my noble friend that I absolutely believe that there is no such thing as a stupid question and that one should not be afraid to ask. I have not been short of advice either within the House or outside it. Perhaps I may reassure him on the C17s. The order for the sixth one was signed in July this year. I am sure that he will find that reassuring.
	As a newcomer to this area—

Lord King of Bridgwater: My Lords, the Minister said that she was concluding, but one further subject received considerable attention from noble Lords who spoke in the debate: the position of the Secretary of State. I entirely realise why she is not able to reply to that herself in this debate, but she may recall that I made a single request and I ask her, please, to give me an answer. Will she ensure that a copy of Hansard of this debate is delivered personally to the Prime Minister and that he is encouraged to read it? Within the House there are voices—I do not include mine, as it is some time since I was involved in defence matters—to which the Prime Minister would be well advised to listen. I believe that it is very important that he hears those views.

Baroness Taylor of Bolton: My Lords, I can assure the House that the Prime Minister takes defence matters very seriously. He has spent a great deal of time on defence and security issues since he became Prime Minister and indeed before that. When I was chair of the Intelligence and Security Committee, I knew that he took an interest. On the specific request, I will send a copy of Hansard and point out the suggestion made by the noble Lord because I am sure that the Prime Minister will take a great deal of interest in all debates on matters of this kind.
	I thank the House for the advice that it has given me. I hope to write to noble Lords who have asked me to reply on specific points in that way. This is a very serious subject indeed. We know that we must be conscious of present demands and future needs, but we are certainly sure of our obligations to all in the Armed Forces and to the families and veterans. That will remain one of the priorities of the department.

Baroness Park of Monmouth: My Lords, before my very brief peroration, I point out to the Minister that both the NAO and the families unit—the organisation of the noble Baroness, Lady Dean—have come out with the greatest detail on the problems of harmony. It really exists and cannot be put off with more and more discussions by all sorts of committees that are set up to discuss the matter again. It is a fact that has to be faced.
	I thank all noble Lords for a splendidly vigorous, passionate and well informed debate. I congratulate the Minister on her baptism of fire, which she seems to have come through very well. I cannot help noticing, however, that the Benches behind the Minister have been singularly empty. That has been more than made up for by two remarkable members of her party—the noble Baroness, Lady Dean, and the noble Lord, Lord Gilbert—who have, I suppose had the strength of 10. It would have been nice, however, if we had seen a little more consideration of and interest in a subject that is a national issue, not a party one. It is sad that those Benches are so empty.
	I hope that both the armed services and the public will hear all that we have said today. The man who I want to listen, as we all do, is the Prime Minister. He admires courage, has spoken for veterans and seems happy to use the Armed Forces as the powerful policy arm that they are. Let him give us one Secretary of State, not two halves; that would make an immense difference and send a signal that he is actually listening. Lastly, I would settle for the return of the noble Lord, Lord Drayson, in some capacity, as a down payment. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

Social Security (National Insurance Credits) Amendment Regulations 2007

Lord Skelmersdale: rose to move, That an humble Address be presented to Her Majesty praying that the regulations laid before the House on 7 September be annulled (SI 2007/2582).

Lord Skelmersdale: My Lords, I had little thought when I put down this Prayer that we would be debating a second failure by Her Majesty's Revenue and Customs within a week. Rather than the loss of a disc of the financial records of 25 million people, this social security statutory instrument reveals a joint failure by HMRC and the Department for Work and Pensions, a department whose care and attention to detail has been slipping woefully under this Government. As recently as 25 October, I complained about this when we discussed the Housing Benefit (Loss of Benefit) (Pilot Scheme) (Supplementary) Regulations 2007, saying that the department's predecessor department, that of social security, was considerably more efficient.
	These regulations, which came into effect on 1 October, have been made to correct the overpayment of benefits—jobseeker's allowance, incapacity benefit, bereavement benefit and the state pension. As the Explanatory Memorandum states:
	"The changes ensure that earnings ... which were erroneously awarded ... will still count towards the satisfaction of the contribution conditions",
	for those benefits. They also mean that decisions will not be revised, and ensure that certain classes of contributions will be treated as being paid on time, whether they actually were or not. In other words, they provide an amnesty for benefit claimants who have been overpaid due to, we are told, a mismatch of data between two computer programs—the DWP's pensions strategy computer system and the NIRS2 computer run by Her Majesty's Revenue and Customs. There are, we are told, 90,000 such cases of overpayment. Lucky recipients; they are clearly doing rather well out of this exercise.
	Not only that, on the other side of the equation it is estimated that 30,000 claimants have been underpaid. The Explanatory Memorandum states:
	"The decision has been made to make good the underpayments".
	How gracious can you be? Were such sentiments to appear on a public paper over which I, as a Minister, had control, they would certainly not appear like that. The noble Lord must be heartily relieved that few, if any, benefit recipients will read the Explanatory Memorandum. Unsurprisingly, I would be much ruder if such a decision had not been made, and we certainly would not be debating this matter late on a Thursday.
	This mismatch of computer systems has been going on since 1998. While we are told that the period in question finished in 2006, the regulations are of a much wider scope, with a start date of the financial year 1993-94, ending in 2007-08. Why this very long period? How, too, can we be assured that this is the end of the matter?
	I observe from the 31st report of your Lordships' estimable Merits of Statutory Instruments Committee that:
	"The flaw in Her Majesty's Customs and Revenue NIRS 2 computer has been identified and is believed"—
	I underline that word—
	"to have been operating correctly since November 2005".
	"Believed" is a very odd word in the circumstances. If it has been working correctly since then, there should be no new cases of overpayments since then or, indeed, of underpayments. Why then does this statutory instrument extend the amnesty for another 16 months until April 2008? That belief cannot be very strong. If it is ill founded, will we not find another order next year to do exactly the same job? Was that computer program, NIRS2, created by the same firm—EDS, I believe—that programmed the one dealing with the Treasury's tax and pension credits? Are they perhaps even the same computer?
	I have never heard that there has been an amnesty for overpayments in the tax credits areas since the Government introduced it. We have heard screams of rage from people who have been overpaid and have had to pay the money back. It is hardly surprising when people on low incomes suffer very badly from an irregular income stream. It seems that there is a division of opinion between the DWP and the Treasury about what should happen in these cases. Did the DWP need Treasury approval before laying the regulations, or did it do so off its own bat? My party has decried this creeping control of social security by the Treasury on a number of occasions. Is it not high time that the Government sorted themselves out and the Treasury did what it is good at—collecting money—and the DWP paid out pensions and benefits, which is what it is good at? Then we would not have the nonsense of tax and pensions credits being overpaid and having to be clawed back.
	Although I do not like it, I have to accept that we are where we are and that this statutory instrument seeks to sort out yet another mess of the Government's making. Why is it that every time the Government go out to tender on a computer program, it hardly ever delivers what is required and yet more taxpayers' money needs to be thrown at consultants to sort it out? In the summer of 2005, we learnt that the Office of Government Commerce—ironically to be found in the Treasury—revealed that of 254 computer projects, one-third had skipped the first two stages of evaluation, which include an assessment of whether the new computer system is,
	"feasible, affordable and likely to achieve value for money".
	Furthermore, while 57 projects were awarded a green-light rating, 127 had amber warnings and 70 had red warnings, meaning respectively that the project could continue only provided certain alternations were made and that immediate remedial action was needed. Eight projects were given double red warnings that prompted letters to the relevant Permanent Secretaries stating that the project had very serious problems.
	I have a pet theory to put to the Minister. It is that the team in the department—any department—that arranged the original contract is not the one that receives the finished product, because big computer programs take longer to develop than civil servants remain in any particular job. Each new team will have its own ideas about what should go into the program, hence more delay and cost. My theory is backed up by a question I put to the noble and learned Lord, Lord Falconer of Thoroton, when, as Lord Chancellor, he was answering a Starred Question about a project being commissioned at the time for which his department was responsible. I asked him for a guarantee that there would be no changes to a contract under discussion before delivery of the finished product. He failed to give me that assurance. He said:
	"We will do our level best to ensure that all the requirements are provided at the earliest possible stage. I cannot guarantee that we will get it absolutely right but, plainly, the noble Lord's point is a good one".—[Official Report, 15/3/04; col. 7.]
	How long did it take for NIRS2 to be developed? When was it delivered? How many civil servants who commissioned it were in post to run through it when it was finally delivered? The only way to mitigate the problem of computer failures is, as a Select Committee of another place so wisely suggested, to nominate a civil servant to oversee a computer project from the original specification to final delivery. Have Ministers in the Department for Work and Pensions had discussions on this with their Permanent Secretary? Indeed, does the Minister know of any department that has held such discussion? I hope that he will be able to answer the first question today; I should be more than happy to have an answer to the second question in writing.
	Your Lordships' Merits Committee zeroed in on the waste of taxpayers' money, which of course also concerns me. Up to £300 million, covering possibly 90,000 awards of benefit, is to be written off. I say "up to" as it appears that no one knows how many claims have been overpaid or to what value, and in the circumstances it appears that it is not worth the trouble and expense of finding out. Are discussions going on regarding the possible suing of the computer company, as they are about the program dealing with tax and pensions credits?
	Whichever, this £300 million is the beginning of the cost to the taxpayer. There is another £65 million or so of underpayments to be made good from the department's administrative budget. This amount of money sloshing around in the administrative budget does not smack to me of tight fiscal control. Add those two unexpected sums together and you get £365 million, more or less. You would expect that that would solve the major part of the problem—unfortunately, not a bit of it. There is still the little matter of correcting the computer fault. Additional computer costs are believed to be £0.7 million, shared between the DWP and HMRC, with suggested HMRC staff costs of £1.3 million. Knowing that computer specialists command more in an hour than your Lordships' expenses allowances command in a day, I am not surprised by the first figure, but what on earth are the enormous HMRC costs for?
	This has been yet another very sorry story, to which I would like the explanations for which I have asked. In essence, I am concerned at the Government's very loose control over the public purse and their abject failure in anything to do with computers. I beg to move.
	Moved, That an humble Address be presented to Her Majesty praying that the regulations laid before the House on 7 September be annulled (SI 2007/2582). 31st Report from the Merits Committee, Session 2006-07.—(Lord Skelmersdale.)

Lord Kirkwood of Kirkhope: My Lords, the House should be grateful to the noble Lord, Lord Skelmersdale, for moving this Motion. It involves a series of very important points. The noble Lord made a very effective speech and I concur with much, if not all, of what he said. I shall ask some questions. If the Minister cannot answer them this afternoon, perhaps we could share correspondence which might shed light on some of these matters to the benefit of everyone involved.
	On 15 November, Mr James Plaskitt announced in the House of Commons that there were 4,000 duplicate payments in the Pensions Service and the Disability and Carers Service as well as ex gratia payments. Is that part of the same problem, or is it something else altogether that is embedded in the Disability and Carers Service? Is it part of the pattern? The noble Lord, Lord Skelmersdale, made the important point that the national insurance recording system is the basis on which contributory benefits are calculated. If they are wrong, everything downstream of that is, almost by definition, likely to become wrong. So the integrity of the whole contributory system requires that the 70 million records currently held on NIRS2, as it is known by acronym, are an essential part of the integrity of payments of benefits of a contributory kind.
	There are 152 or more incoming streams of data into NIRS2. That is not an easy project. It enjoyed a very troubled birth. I think that Andersen Consulting went bankrupt as a result of putting the thing into place, EDS tried to take it over, and it is now in the hands of the Aspire Group of contractors. Perhaps the Minister can confirm that that is indeed the case. It is a process that is very difficult to amend because it is live all the time. You cannot switch it off overnight to clean up data. An important question to which the House needs an answer is: what mismatch went wrong? A mismatch of data is a description of a symptom of a mistake in the process. What we want to know is: what was the mistake in the process? Are the data corrupt on both platforms? Are the data identified as being corrupt on one or other of the two systems? They are entirely different bases of software. They were not designed to run together, so they could both have problems unique to themselves, or it could be a problem of the integration of the two. It is important to understand precisely what went wrong so that we can understand whether the process has been rectified.
	Further, although the scanning was obviously necessary to pick up the problem, will the fix be a software fix or will some of it need to be done manually? Some recipients of overpayment or underpayment will have to be contacted individually, so there is obviously going to be an element of manual handling, but will the debugging of the interface between the two different bits of software be done electronically, or will members of staff in the DWP have to turn their hands to some of the record cleaning by themselves as a desktop exercise?
	One thing that has a direct bearing on that is the very, very tight departmental expenditure limit for the next three years just announced in the Comprehensive Spending Review. That will put great pressure on the head count, because the head count is separate and distinct and will have to fall, never mind the fact that the money in the DEL is being reduced over the next three years. To what extent has the overpayment been provoked by the fact that the department may not even have the staff to do that in any other way? Of course the overpayments are welcome, because it is no fault of the claimants of those benefits that the mistake has been made. To what extent has the tight envelope that the Department for Work and Pensions been facing been a contributory factor in working out how to fix the problem?
	What has the National Audit Office and the Comptroller and Auditor-General to say about all that? This is one of the principal reasons that the department's accounts have been qualified endlessly for the past seven, eight or more years. Until we get the reconciliation of data streams organised in a way with which the Comptroller and Auditor-General is satisfied, the department's accounts will continue to be qualified. To any kind of business outside the public service, that would be an almost fatal blow to its credibility in the marketplace. That is a serious issue and a key element in why the accounts continue to be qualified.
	What exactly were the communications between the Social Security Advisory Committee and the department? We are told in the Explanatory Memorandum that, at the end of the day, the SSAC was satisfied with the instrument and let it proceed, but because the Inland Revenue—the HMRC—is involved, we cannot see, as we could if it were an entirely DWP issue, exactly what the SSAC had to say. It would publish memoranda, reports and everything that involved it directly if the instrument were referenced by the department to the Social Security Advisory Committee. I am prepared to believe that, at the end of the day, it was content to let the instrument proceed, but were there communications between the committee and the department that we cannot see because of the involvement of HMRC, the Inland Revenue, that would cast some light on any concerns that the committee originally had? This is a very technical business, and I for one would have been a lot more content if any communications between the department and the SSAC, and indeed between the department and the Comptroller and Auditor-General, about these matters, had been published. I would certainly have been an awful lot more confident that the thing was being done in the best way possible.
	Finally, I am very uneasy. I know that we have to do this and I understand the need to protect the claimants, but the regulations are creating a unique class of 130,000 claimants at law. Apart from anything else, that does not help to deal with the complexity; it simply creates extra layers of things that people have to pay attention to when implementing the rules as they stand. It is a worrying precedent to find that there has been an error in the department. It is good that the department has owned up to it. This has been going on for a long while. One might have thought it possible to fix it earlier, but we are where we are, as the noble Lord, Lord Skelmersdale, says, and we must accept that no one is suffering financially as a result. However, creating a completely separate class of people at law is a worrying precedent. Indeed, is it a precedent? I believe that the regulations are time-limited, but having been through this procedure, can we take it as read that, if there are mismatches between NIRS2 and the pension service computer system in future and it goes wrong again, there is something to which we can resort in the future? This is the first time to my knowledge that the regulations have been changed to protect the claimants in the way in which the Government have sought to protect them.
	The noble Lord, Lord Skelmersdale, is absolutely right that there is much at stake in the regulations. This is not only about the lack of competence and the complexity but about the difficulty in trying to use the meagre resources available to the department to handle some of these very sophisticated IT systems in a way that guarantees that no one suffers at the end of the day. Although these people have been picked up, others in the system might not and might be suffering as a direct result of the complexity of the IT systems.

Lord McKenzie of Luton: My Lords, I thank the noble Lords, Lord Skelmersdale and Lord Kirkwood, for their contributions today. I understand that the mechanism of the prayer is to be able to debate the issue rather than to seek seriously to disrupt the regulations. I hope that that is the case. I shall start by putting matters into context. Without being complacent about the issue that has arisen, there are 65 million active national insurance accounts, 11.7 million customers who receive the state pension, and 2.7 million individuals who receive incapacity benefits and credits. That is the scale of the DWP's customer base.
	I have listened to all the points made on the Motion to annul the regulations, which among things legitimise certain payments of the state pension, incapacity benefits, jobseeker's allowance, bereavement benefits and widow's benefits. These benefits are invariably paid to vulnerable people or to people with a limited income. The 31st report from the Merits of Statutory Instruments Committee has drawn the regulations to the attention of the House on the grounds that they give rise to issues of public policy likely to be of interest to the House, and that it may wish to probe the cost of the flawed computer system to the public purse and how the error came about; exactly the issues that have been raised this afternoon.
	The reason for the incorrect calculation of these benefits is the mismatch of data about the period of incapacity and the award of national insurance credits. The DWP is responsible for administering claims for incapacity benefit for which national insurance credits are awarded for the period in which the person cannot work. The DWP computer records the period of incapacity, and the HMRC computer records the awards of the credits. It became clear that discrepancies existed between the data held on these two computer systems, and this was picked up by the National Audit Office in its report on the National Insurance Fund for 2004-05.
	The error arose, a point pressed by the noble Lord, Lord Kirkwood, as a result of the conversion of data held on the first national insurance recording system, NIRS1, to the second system, NIRS2, in 1998. The IT fault was exaggerated by a breakdown in the supporting business processes intended to resolve discrepancies between data held on the DWP computer and the NIRS2 system. I apologise for the error and its ensuing consequences. The DWP has worked with HMRC to resolve both the IT and business processes, and I can assure the House that the IT problem has been resolved since November 2005. New instructions have been issued to DWP staff setting out the actions that must be taken to rectify customers' records when mismatches occur. The House will be aware that a Written Ministerial Statement was made by my honourable friend James Plaskitt on 23 July explaining the background and setting out how the Government intended to correct the affected cases, both of overpayment and underpayment. It was clear that the underpaid cases would have to be corrected, but we have to consider carefully how we deal with the overpaid cases, a point again pressed by the noble Lord, Lord Kirkwood.
	The sole reason for the overpayment was the mismatch of the data recorded on two government computers. This can and should be classified as official error and therefore in this instance it would have been inappropriate to seek to recover any of these overpayments. I should say to the noble Lord, Lord Skelmersdale, that this is a completely different situation from tax credits where, as we have debated before, what are labelled as overpayments come about as a consequence of how the calculation proceeds under the rules.

Lord Skelmersdale: My Lords, it may be a completely different situation, but the result in essence is exactly the same.

Lord McKenzie of Luton: My Lords, I do not accept that. Perhaps we may go into the detail of the point on another occasion because my time this afternoon is limited.
	We estimate that up to 30,000 people may have been underpaid contributory benefits, and the annual amount of underpayment is estimated to be around £65 million a year. However, in some cases no arrears will be due, or partial arrears will be due, because income-related benefits such as income support or pension credit have been paid in place of entitlement to a contributory benefit. The Government have given priority to correcting underpayments to ensure that people receive their correct entitlement, and compensation where there has been significant delay in making payment. Work to identify actual underpayments and to pay arrears is now under way and we expect to complete this work by early 2008. I should also advise the House that work to correct underpayments does not depend on the regulations before the House today.
	I turn now to the issue of overpaid awards of benefit. We estimated that up to 90,000 people may have received overpayments. Of these, around 75,000 are pensioners. There was a choice. We calculate each case and where appropriate offer the option to pay national insurance contributions to restore the original amount of benefit or to allow the existing payments to continue. The first option would have meant disrupting not only entitlement to contributory benefits like state pension, but also entitlement to pension credit, income support, housing benefit and council tax benefit where these are in payment. People may have been unable to find the money to pay the national insurance contributions, and pensioners in particular may not have been able to find the money, in effect reducing the state pension and requiring reassessment of the other benefits, with the net outcome that the pensioner is likely to be no worse or better off.
	These regulations provide the second option. They avoid creating anxiety and disrupting income flows for those people affected by the over-award of incapacity credits which would otherwise have followed if we took the first option. They also avoid unnecessary administrative work not only for DWP and HMRC, but also for local authorities. This approach recognises that such awards have been made and received in good faith, and it also recognises that some people may be placed in a difficult position if the awards were now to be revised. For example, people of pension age may be reliant on the level of income awarded to them, and financially it may not be as easy for them to make further contributions in retirement. They may also have taken this level of income into account in assessing how much money their spouse or civil partner will receive in the event of their death.
	Similarly, people receiving bereavement benefit or extra state pension because of bereavement may be placed in a difficult position if the contribution record of the deceased spouse or civil partner is corrected and their benefit is reduced or withdrawn. As making further contributions to the deceased contributor's account is not possible, some form of special action would be required to address this.
	After careful consideration, the regulations were introduced to protect existing awards of state pension, incapacity benefit, jobseeker's allowance, bereavement benefits and widows' benefits which are based on incorrect records of certain credits. In the event of the death of a pensioner with a protected award, the regulations ensure that a surviving spouse or civil partner retains inherited entitlement to benefits.
	Our estimate of the cases affected—30,000 underpaid and 90,000 overpaid—is no more than that. The estimates were based on limited information from a pilot exercise run by HMRC and, on the basis of that limited exercise, the annual cost of making good the underpayments is around £65 million and the amount overpaid around £90 million, which will decrease over time. We cannot be precise about the costs because of the interaction with income-related benefits, as I have explained. The administrative cost of £8 million that would be incurred without the regulations is also a broad estimate. It could be higher or lower depending on how complex it would be to correct the overpaid cases and invite and assess claims for pension credit and income support.

Lord Kirkwood of Kirkhope: My Lords, for the avoidance of doubt, will the Minister make it clear that the money to be found to make this good will not come from the National Insurance Fund but will be found within the department's CSR over the next three years?

Lord McKenzie of Luton: My Lords, the administrative costs will have to come from the routine DWP DEL budget.
	For example, a pensioner who received a state pension and pension credit might be no worse off if we were to calculate and reduce his state pension because that would lead to an increase in his pension credit. In other cases, the reduction in state pension would give rise to pension credit. Similarly, people below pension age who have been overpaid could have their benefit increased by claiming income support. Generally, when assessing the effect of the cost, we would expect that income support was in payment in up to 45 per cent of incapacity benefit cases and pension credit was in payment in about 65 per cent of state pension cases. The interaction with other benefits would therefore have a huge impact on the actual cost of correcting these cases. We will only know the true cost of correcting the underpaid cases once we have completed the exercise.
	As I have said, the regulations deem the over-award of benefits to be legally correct, thereby avoiding the need to re-examine these cases. Although we are honouring existing awards of benefit, we recognise that the Government have a duty to ensure that errors in credits data are not perpetuated. For this reason, HMRC will correct national insurance records for those under state pension age so that future claims to contributory benefits can be correctly assessed. Where correcting the individual contribution record results in particular years being no longer qualifying years for state pension and other contributory benefits, HMRC will write to the individuals concerned advising of them their options and asking if they wish to pay any missing contributions. They will have six years to take up that offer, and payment of contributions will be at the rates that applied during the tax year concerned.
	The Government do not believe that it would be right to seek a saving in relation to future costs given the background to the issue. Just as the Government have a responsibility to people who have been underpaid, they have a responsibility to those who have been awarded too many credits and who, as a consequence, have been overpaid benefit but were denied the opportunity to make up shortfalls in their national insurance records at the relevant time. That has been the result of system and related procedural errors and is not the fault of the contributors.
	People depend on the Government to advise them about their national insurance record so that they can make properly informed choices about how they may protect or increase their entitlement to benefits. Decisions about whether to apply for credits or pay voluntary contributions are influenced by the information provided by the relevant government departments, and it is likely that much of the amount referred to as a potential overpayment would have been properly payable now, had the system and procedures worked properly, as a contribution to contributory and income-related benefits.
	Specific questions were asked, and I will try to deal with as many of them as I can. The noble Lord, Lord Skelmersdale, asked whether the Treasury had approved the orders. Of course; we sought and received the Treasury's agreement to allow the orders to be made. The noble Lord, Lord Kirkwood, asked about recent announcements about 4,000 cases of double payment. That relates to a small number of cases—4,000, as he identified—out of 1.6 million cases where DLA or AA is combined with state pension and pension credit. In this instance, there appears to have been a breakdown in communication between the Disability and Carers Service and the Pension Service over the benefits paid to a small group of customers. Steps have been taken to prevent such duplicate payments occurring in the future. That is a separate issue.
	Both noble Lords asked who the NIRS2 supplier was. Andersen Consulting, later Accenture, implemented the upgrade of NIRS1 to NIRS2. The current system is operated under the ASPIRE contract since January 2005. The noble Lord, Lord Skelmersdale, referred to the phrase,
	"believed to have been operating correctly since ... 2005",
	and asked why there should be any extension beyond that. Testing has confirmed that the interface between the two computer systems has worked correctly since November 2005, but we have decided to look at all cases from 1993-94, the start of the strategy computer system, and go up to 2006-07 because it is just possible that some cases actioned after November 2005 could have had handling errors, although staff training has been improved.
	Reference has been made to HMRC staff costs of £1.3 million. Those costs reflect the fact that those affected will contact HMRC about their national insurance record and the question of collecting and allocating class 3 contributions. I have dealt with the issue of the 4,000 duplicate payments. The noble Lord, Lord Kirkwood, asked about the SSAC. The issue was explained to the committee, which saw the draft regulations. The committee did not write to DWP Ministers.
	That is the bulk of the issues that were raised. I will review the record and write further to noble Lords if necessary. The concerns raised by the Merits Committee and by noble Lords during the debate are recognised. We have resolved the issue that led to the errors and have acted in a balanced and proportionate way to put right the affected cases. We are firmly of the view that we have done the right thing by introducing the regulations, thereby avoiding unnecessary anxiety and distress for some 75,000 pensioners in particular. I hope that noble Lords will agree that in all the circumstances the only credible option now is to introduce the regulations.

Lord Skelmersdale: My Lords, that was an interesting speech from the Minister. He seems to have gained the impression in the preparation thereof that what the noble Lord, Lord Kirkwood, and I were complaining about was the existence of the order. Of course we are not; we are interested in the background, the follow-up and the previous activities of the two computer systems and the two departments.
	Although the Minister explained carefully why the amnesty was going on for another two and half years or so at the end of the period, he did not answer my question about why that period started so early. Am I to assume that it was in the year 1993-94 that the transfer was made from NIRS1 to NIRS2? If not, there seems to be no good reason for the period to start as early as it does.

Lord McKenzie of Luton: My Lords, the transfer from NIRS1 to NIRS2 took place in 1998, and that was certainly a key factor in the errors that arose. For the avoidance of doubt, I can say that checking is going on right back to that earlier period. In his presentation the noble Lord asked when NIRS2 was developed. I do not have a precise starting date, but it was clearly developed some time before 1998 because that is when it was actioned.
	Earlier I did not answer the point about the OGC reviews and the red flags that were given to certain projects. The whole purpose of such reviews is for someone external to come in and look at the teams that are producing change, to check that their systems are up to scratch and that they are doing the testing and putting in all the arrangements that they should in order to deliver on the desired policies. The fact that from time to time there are red, or sometimes orange, flags is entirely consistent with what they are required to do, and is one of the Government's safeguards.

Lord Skelmersdale: Yes, my Lords, it is of course part of government safeguards, and it should be part of Parliament's safeguard on occasion to give the Government a green flag, an amber flag or a red flag. In this case, I think that the noble Lord, Lord Kirkwood, and I would agree that it is an amber flag; there is no way in which we can give it a green flag. However, the regulations are clearly beneficial to some 120,000 people. On that basis, I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.

Housing Benefit (Local Housing Allowance and Information Sharing) Amendment Regulations 2007

Lord Oakeshott of Seagrove Bay: rose to move, That an humble Address be presented to Her Majesty praying that the regulations laid before the House on 8 October be annulled (SI 2007/2868).

Lord Oakeshott of Seagrove Bay: My Lords, following the analogy that we heard when discussing the previous regulations, I make it clear that we are not trying to wave a red flag at these regulations, although we certainly wish to wave a few amber flags around, raise some questions and get some answers from the Minister.
	I make it clear that we welcome the evidence from the nine pathfinder areas that direct payments have risen to 84 per cent from an average of about 45 per cent before local housing allowance was introduced. We support the Government's ambition to encourage financial responsibility and we recognise the evidence that financial inclusion is an important step towards finding employment and getting off benefits. However, we are not convinced that the local housing allowance policy will achieve these objectives when it is rolled out nationally and that proper provisions are yet in place to protect vulnerable individuals.
	The DWP Housing Benefit Local Housing Allowance Guidance Manual, for use by local authority housing benefit officers, states very clearly:
	"You will not be expected to be pro-active in identifying someone as potentially an unlikely payer".
	Vulnerable individuals are therefore responsible for presenting themselves as likely rent defaulters. How can that be right for mentally impaired people, illiterate people, those who cannot speak English or those who are tackling drinking or gambling addictions? Cases can be referred also by landlords, friends or families, but these people may after all have their own agendas. As part of the purpose of the reform is to remove the stigma associated with housing benefit, how will landlords know that tenants are receiving LHA and be in a position to raise the alarm about non-payment? Cases can be referred also by advice, welfare or social services.
	As my noble friend Lord Addington proposed in Committee, we should assume that these vulnerable groups will struggle to handle their financial affairs. Changes to direct payments should therefore take place only once an assessment has been made that they can cope. In its current form, payment to landlords and a case assessment are not automatically triggered until rent has fallen into eight weeks of arrears. That is a long time for money to be misspent and for relations between landlord and tenant perhaps to break down.
	In some pathfinder projects, benefit officers were keen to intervene early in cases where rent went unpaid, rarely waiting for the eight weeks of arrears before triggering an investigation. Is there not a danger that sharp landlords will spot that, by alleging rent arrears, they can get their income guaranteed? Evidence from the pathfinders suggests that there is a problem with the appeal system being clogged with allegations of arrears.
	Housing benefit officers are encouraged to become proactive only once direct payments have been suspended. The DWP guidance manual states:
	"If you decide that direct payments are appropriate, you should set a diary date in order to conduct a review of your decision, not exceeding 12 months, to look again at the decision".
	That review process is expected to be repeated annually. For the most vulnerable individuals, for whom direct payments will never be appropriate, that can represent an annual ordeal of uncertainty. For LHA to prove effective, a more reliable and proactive system is required to identify vulnerability. The objectives of the reform may be admirable, but the assumption that direct payment is suitable in all but the most extreme cases is wildly overoptimistic.
	Why do the Government assume that this change to LHA will represent a major lifting of the administrative burden? Some aspects of the reforms are genuinely simpler, such as calculating rent levels from local median estimates, for example, rather than the actual rent paid. Other parts are hideously complicated, as when HB officers are expected to take account of other income received by the tenant and the impact of other people living in the household, for example. The conclusion from the pathfinder evaluation is, I am bound to say, very carefully worded. It says:
	"On balance the net effect administratively of the LHA ... in the longer run ... ignoring set up costs and some specific implementation difficulties, is probably positive, but it is unlikely that this constitutes a 'substantial' advantage to HB administration and delivery".
	That is not exactly what I would call a glowing reference.
	We simply cannot make fundamental reforms of this flawed system on the cheap. Any reform of housing benefit delivery must be properly resourced and take account of large numbers of vulnerable cases requiring sensitive handling. The more complicated estimates of rent settlements, which in most cases increase income, such as the impact on others living in the house, will be overlooked—or there is a danger of it—if we do not put enough resources into reforms. The evidence by one HB officer to the pathfinder evaluation made the point well. He said:
	"Dealing with claimant vulnerability has ... frequently proved to be difficult, time-consuming and resource intensive, and significant efforts have had to be made to set up and maintain arrangements with other departments and agencies in order to adequately fulfil this function".
	What assessment have the Government made of the extra burdens that they are placing on our already strained advice services? The LHA guidance manual instructs local authorities to refer cases to advice services for almost any problem. If direct payment has been suspended, advice services will work with individuals so that it can be restored. If vulnerability has been identified, local authorities are instructed to refer to advice services and, if clients require a bank account to begin direct payment, they are advised to call advice services—and advice services are one of the bodies expected to identify potential vulnerability. The burden laid on them hardly bears thinking about.
	The experience in pathfinder areas has been largely positive, to be fair, with local authorities and welfare and advice services working together so far. However, it is wishful thinking to presume that that will be repeated everywhere after national rollout. As Citizens Advice said in its submission to the evaluation, it is,
	"worth noting that all the pathfinder authorities had made a choice to take part in this pilot, and were also well resourced and supported by DWP. They were therefore highly committed to making it work. These conditions will not be present in national roll out".
	Indeed, wider Citizens Advice and Shelter evidence on delivery across the country,
	"leads us to believe that it is very unlikely that this level of activity and commitment will voluntarily be undertaken by every HB department".
	That is Citizens Advice—and if that organisation does not know what it is talking about, I do not know who does.
	We on these Benches have warned the Government time and again that advice services funding is hampered by ring-fencing of funds and reliance on a plethora of different forms of funding, in some cases almost in penny packets. We have had this same problem come up under the whole question of generic debt advice and pensions. Individuals who are most likely to struggle under the LHA provisions are also most likely to need additional advice, whether on debt, disability, welfare, employment or immigration. Can the Minister assure me that increased funding for advice services will incorporate provisions for general advice as well as specific housing benefit advice?
	This is a missed opportunity to reform the arbitrary unfairness experienced by people under the age of 25, as we discussed in debates on the Welfare Reform Bill. The room rates for single people, who are statistically far more likely to be in poverty already, and the most vulnerable to drugs and homelessness, are simply inadequate. The pathfinder evaluation reported that across the nation the rate at which the LHA is set is generally considered fair and adequate to meet housing needs, except the rate set for shared rooms, which is the rate to which under-25s are constrained.
	Citizens Advice found that 87 per cent of single-room rent claimants have faced a shortfall between housing benefit received and the rent levels that they pay. The research says that this inevitably,
	"puts young people at greater risk of social and financial exclusion, making it more difficult for them to find and sustain employment".
	How can it be right that local housing allowance fails to help young people at their most vulnerable when they are starting their careers and living away from their families? I beg to move.
	Moved, That an humble Address be presented to Her Majesty praying that the regulations laid before the House on 8 October be annulled (SI 2007/2868).—(Lord Oakeshott of Seagrove Bay.)

Lord Skelmersdale: My Lords, I am grateful to the noble Lord, Lord Oakeshott, for bringing these orders on the new local housing allowance to our attention this evening. I certainly do not agree with him, as he knows well, on the last point that he made in his introductory speech.
	I noticed that all the orders were made on 2 October this year. My first question is rather technical but, given my interest in statutory instruments, it is this: we have one Explanatory Memorandum covering all four instruments. Why then were four instruments required in the first place, especially as Nos. 2868 and 2869 have exactly the same title? Surely, these and the consequential amendment regulations could have been combined. In other words, we could have had not four in one, but three plus one.
	To turn to the nuts and bolts of the orders, my party's position on local housing allowance was set out in Grand Committee on the Welfare Reform Bill by my noble friend Lord Taylor of Holbeach. Pilots—I do not like the word Pathfinders—were already in existence when that debate was held on 1 March and our concerns revolved around the Government's intention to allow housing benefit claimants to handle their own housing benefit rather than having it paid direct to the landlord.
	We felt and still feel that, even though the pilots have shown, for a limited period anyway, that double the number of self-handlers were capable of paying rent subsidy and indeed did—rent subsidy is housing benefit—there would be those customers who, for many reasons, do not hand the benefit to the landlord. I understand that that figure is about 16 per cent of all housing benefit recipients.
	At the time, I was pleased to hear the noble Baroness, Lady Morgan, say that funding to support the financial advice services had been set aside for the national rollout of local housing allowance. Set aside is one thing, but will the Minister say whether this money is now in place or whether it will be on 7 April next year? I was also reassured by her statement that regulations will ensure that payments can be made to the landlord where customers are known to have difficulty managing their financial affairs. However, as the noble Lord, Lord Oakeshott, has said, housing departments are not expected to be proactive in this matter. Indeed, they seem to be almost prohibited by the guidance. Waiting for non-payment for eight weeks will only mean that the private rented sector will dwindle more and more for housing benefit recipients—a point that I made back in March.
	I was therefore alarmed to read in paragraph 7.2 of the Explanatory Memorandum:
	"Unlike the current system customers will not be able to elect for payments to be made to their landlord".
	Although I accept that customer election does not preclude payments to landlords direct from the local housing authority, how does the Minister square those two statements? What authority remains to allow such direct payments? Where can I find the information in the orders—I looked, I searched and combed through them and failed to find it. Perhaps the Minister can do better for me.
	My other concern about these orders lies in the apparent untoward speed with which they have been made. Prompted by the comments by your Lordship's Merits of Statutory Instruments Committee earlier this week, I looked at the department's website in general and housing benefits/LHA/evaluation in particular. I was alarmed to find only remarks on how and when the evaluation was to be conducted. There was nothing about the completion of such evaluation. Eventually, with further searching, I discovered report No. 10 dated 5 October 2006, which I assume is the most recent report and is headed in part "final evaluation". I would not describe it as an evaluation at all. It is a press release giving a rather gloomy summary, especially as it concludes with a bullet point saying the following:
	"On balance the net effect, after allowing for set up costs and some specific implementation difficulties, is positive, but not considered a 'substantial advantage to housing benefits administration and delivery'".
	Why, then, is the department rushing these regulations for a national rollout through, or has something happened since October last that the department has not revealed, in which case will the Minister kindly reveal it now?
	Talking of revelations, the paper Evaluating the Local Housing Allowance Pathfinders, referred to an independent consortium of the universities of Birmingham, Loughborough and York, along with the National Centre for Social Research,
	"being commissioned to carry out the evaluation".
	I failed to find any references to that evaluation. Has it reported and what, in essence, did it say?
	We are being asked to approve these regulations on what I regard as the flimsiest of evidence. I agree with the noble Lord, Lord Oakeshott—although he did not quite put it this way—that it simply is not good enough.

Lord McKenzie of Luton: My Lords, this has been another interesting debate and I will try to respond to the points raised. However, I first remind the House about the wider context for these regulations and why they are such an important step not only for housing benefit reform but more widely for transforming the way we pay social security benefits in this country.
	It is clear to me that housing benefit plays a vital role in the Government's programme of welfare. Indeed, the objectives we set out when we first floated our plans for housing benefit reform back in 2002 show that local housing allowance aims were at the very forefront of the welfare reform principles that have now become so prominent.
	First, as regards promoting choice and responsibility, allowing people to have rent payments made directly to them was a rather bold prospect when we first raised it more than five years ago. We heard the fears and worries of those people who suggested that tenants would run off with their rent money rather than paying their landlords. Now, not only have we proved the pessimists wrong, but the choice and responsibility objectives that we promoted are at the very heart of what this Government want to achieve. With the local housing allowance, tenants are able to see clearly in advance how much housing benefit they are likely to be entitled to. They will then be able to take responsible decisions about where they live, how much they want to pay in rent and then use that money to pay the landlord themselves.
	Secondly, we said that we wanted to use housing benefit to help support incentives to work—and again, this is very clearly at the centre of what we do. Improving the speed of housing benefit processing times in itself should help give people the reassurance and security they need that benefit claims will be reassessed quickly when they take a job. I am convinced that treating people with respect and encouraging them to manage their financial affairs will go a long way to preparing people for the world of work.
	Thirdly, we have seen the financial inclusion agenda grow quickly over the last couple of years. I am delighted that the local housing allowance plays an important role in encouraging people to use bank accounts and to become financially independent.
	It is important to point out that the specifics of the regulations have been comprehensively tested. The local housing allowance evaluation is probably the largest single evaluation of a housing benefit scheme we have ever undertaken and is a true example of evidence-based policy. The findings of the evaluation have certainly been very positive, and were referred to by noble Lords.
	At the outset concerns were raised that the introduction of the local housing allowance would force landlords to leave the market. In fact, private lettings have increased overall by about 7 per cent during the course of the pathfinders. Of course, this is not all down to the local housing allowance but it shows that the fears that landlords would leave the market in droves have simply not materialised. There is a similar outcome as regards the fears raised that tenants would not pay their rent and would abscond with their benefit payments. On the contrary, the evaluation has shown that tenants in receipt of the local housing allowance were less likely to be in arrears than the control areas that were used during the evaluation.
	Finally, it is important to point out that 84 per cent of tenants in the pathfinders received direct payments, proving conclusively that most people are quite capable of managing their own money. That is a really positive move towards financial inclusion. We have also learnt lessons from the evaluation and made changes to the scheme as a result. Many of these changes are set out in the regulations before us. For example, customers can keep any excess benefit they receive as a result of shopping around for accommodation, but only up to a maximum of £15 each week.
	People should be able to take advantage of the choices available to them, but we do not want to erode their incentive to move into work. We needed to strike a balance between implementing simplicity and providing choice with the need to ensure that we are delivering one of our key housing benefit objectives to support people into work. We changed the way that the rent officers calculate local housing allowance rates by moving from a mid-point calculation to a median. In that way, we can be sure that exactly half the rental market in any area will be affordable to people receiving benefit. We have decided to roll the scheme out nationally on a slower scale, which perhaps addresses the point made by the noble Lord, Lord Oakeshott. That means that only new housing benefit claims or those people who have moved address will be assessed according to local housing allowance rules.
	Some other points were raised in the debate. The noble Lords, Lord Oakeshott and Lord Skelmersdale, asked about funding being provided to local authorities. We have already provided funding of £59 million to local authorities for the rollout of local housing allowance, including money advice. It is for the authorities to decide the nature and extent of the service that they wish to support by way of money advice. That funding was provided at the end of August.

Lord Oakeshott of Seagrove Bay: My Lords, how much of that £59 million will be going for money advice, or is that entirely a matter for local authorities?

Lord McKenzie of Luton: My Lords, it is a matter for local authorities. I think I am right in saying that in the pilots the amount that was finally spent on money advice was less than originally anticipated. If I am wrong on that, I will write to the noble Lord. Essentially, it is up to local authorities.
	The noble Lords, Lord Oakeshott and Lord Skelmersdale, focused on whether local authorities should be proactive in dealing with vulnerable people. The previous guidance said that local authorities did not need to be proactive in identifying vulnerable claimants. Noble Lords will be pleased to know that the current version removes that stricture and encourages local authorities to act in the interests of claimants. The noble Lord, Lord Skelmersdale, asked why we have four sets of regulations. There are two main sets of regulations that need to be amended. One of those relates to working-age claimants and the other to pension credit claimants. Those users need only look at one shorter set of regulations for the local housing allowance amendments instead of a single combined set, which would be twice as long.
	The noble Lord, Lord Oakeshott, asked about the 12-month review of vulnerability. The new version of the guidance says that where a condition is likely to be of a long-term nature, it may be decided that it is not appropriate to set a review date. He also asked what help had been provided to support rollout and whether the national rollout would run less smoothly than the Pathfinders. We have worked extremely hard with Pathfinder authorities to develop and publish a range of support material for the wider national rollout. We provided a comprehensive guidance manual and implementation task sheets, which describe a range of good practices from the appointment of project managers to liaison with landlords. Those are built on the experiences of Pathfinder areas. There is a comprehensive training package and communication material such as leaflets and information letters.
	On the question of whether the new arrangements are more efficient, the pilots showed that processing times for the local housing allowance were on average 33 days, compared to 42 days for private sector claims under current arrangements. That is a not insignificant improvement.
	The noble Lord, Lord Oakeshott, suggested that landlords would allege arrears to receive direct payments. There is no evidence of that in the Pathfinders. As we have discussed, 84 per cent of customers are receiving their benefits themselves and are paying their rent reliably. Of the remaining 16 per cent, three-quarters have their benefit paid to their landlord because of discretionary safeguards that work to stop arrears getting out of hand. Only a quarter had their benefit paid to their landlord because they got into arrears of eight weeks or more.
	The noble Lord, Lord Oakeshott, raised, as I had anticipated, the issue of single room rent. We are aware that sharing is common among younger people. Three-quarters of single young people without children and who are not on housing benefit live in shared accommodation. We do not think, therefore, that it is unreasonable to expect young housing benefit tenants to share accommodation. Abolishing the single room rate would mean that young tenants in receipt of housing benefit could potentially access accommodation that would be unrealistic for a large proportion of their peers. However, we acknowledge that the single room rent causes difficulties for some people for whom remaining in the family home is not an option. However, less than a fifth of customers bound by the single room rent live in shared accommodation; in fact, the majority life in self-contained accommodation.
	I should say that officials have been carrying out some analysis of the single room rent and looking at the availability, accessibility and affordability of shared housing for young benefit recipients. We are particularly grateful for the help and discussions we have had with the noble Lord, Lord Best, and the noble Earl, Lord Listowel, who, unfortunately, are unable to be with us today. They have a wealth of experience in this area and will know from recent meetings that it has been determined that many people on housing benefit stop claiming after a short period. We need to understand why that is the case and where those young people end up.
	I hope that I have dealt with each—

Lord Skelmersdale: My Lords, I hope the noble Lord will forgive me, before he begins to perorate. He has told us that the private rented sector has increased in the past two years. Indeed, it has. Has it increased access for those on housing benefit? That is the key question requiring the key answer.

Lord McKenzie of Luton: My Lords, I understand the point. I think that the evaluation of the pilots indicated that housing benefit claimants are not always universally welcomed by landlords, but I think that I am right in saying that the evaluation of local housing in the pathfinders produced no evidence of a further restriction on private sector landlords, but I shall write to the noble Lord to clarify that.
	I hope that I have addressed the points raised. The local housing allowance that we will introduce next year, for which this package of regulations provides, will be based on the fundamental principles of choice, fairness and responsibility. Thousands of customers have benefited from the local housing allowance in the pathfinder areas and we want to extend those benefits to housing benefit customers nationwide. This is a positive step in modernising housing benefit and I look forward to national rollout building on the clear successes of the pathfinders.

Lord Oakeshott of Seagrove Bay: My Lords, to use the word of the noble Lord, Lord Skelmersdale, you will be pleased to know that I am all perorated out. I just want to thank, first, the noble Lord, Lord Skelmersdale, for his support on certain issues. I am sorry if he felt that I was not tough enough. Perhaps we should not have been talking about flags. Perhaps on this day of national mourning we should be talking about red cards and yellow cards. I am sorry if I have not waved the yellow card strongly enough for him. I thank the Minister for his comprehensive reply. I am grateful for his clarification that the latest version of the guidance manual has taken on board the points that we were concerned about. Obviously, we will read carefully and reflect on the rest of his speech. I am sure that we will return to these issues in the near future as evidence builds up on the ground on how it is all working. Meanwhile, I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.

Housing Benefit (State Pension Credit) (Local Housing Allowance and Information Sharing) Amendment Regulations 2007

Motion not moved.

Housing Benefit (Local Housing Allowance, Miscellaneous and Consequential) Amendment Regulations 2007

Motion not moved.

Rent Officers (Housing Benefit Functions) Amendment Order 2007

Motion not moved.
	House adjourned at 5.25 pm.